Posted on 08/07/2007 10:52:02 AM PDT by blam
You mean the way Russia hung itself w/ the rope we sold to
Nikita Kruschev?
If China unloads its vast currency reserves in the form of
US T’s, US int rates rise presumably, strengthening the USD.
Making dollar-denominated assets more attractive and thus
tunring overseas risk capital into flight capital. And thus drawing
foreign capital away from risky places like China and inviting
that capital into safe havens like....US T’s.
China can use the stick. They can even use a stick that they
manufactured in direct violation of patent rights. We’ll use stealth.
MV
Give this pedestrian a thumbnail sketch of what it's talking about, please.
How does a nation 'buy' dollars?
Why would they?
Why would we sell?
I vaguely understand FRN's ( but not really)
Anyway ... that's your job on FR ... edamucate us dumbo's.
I’m sure the Fed would be glad to buy them at 1 cent to the dollar......
__________________________________________________________
Let’s sell them Rockefeller Center at inflated prices like we did to the Japanese . . . and then buy it back at pennies on the dollar!
Let ‘em. Let’s see what happens to their own banks as a result. Their own banks are in a world of hurt. We stop buying Chinese goods, China’s ‘bicycle economy’ stops moving forward and tips over, leaving their banks with massive uncollectable debt.
And furthermore, who’d buy the paper?
It sounds like they don’t understand economics. Unloading their dollars all at once would be economic suicide for them, not such a bad deal for us.
>>>Hmmmmmm. The yuan is tied to the dollar. If they nuke the dollar, they nuke themselves.
>>>Unless they float the yuan, which is what we want them to do in the first place...
>>>Did I get that right?
Touche!
MV
I understand that it has potential significant consequences.
You'd be wise to ask others for advise on this subject. (Now, if you want to talk about anthropology/archaeology I'd be glad...)
bump.
Precisely. China dumps US Treasuries, the dollar tanks, the yuan floats to where it should have been all along, and Chinese products cost more than American products.
We get hyperinflation, surging interest rates, and a recession...but we benefit from a newfound surge in US manufacturing, more jobs, and a stronger long-term outlook.
China gets an enormous drop in GDP, pennies on the dollar for all of those US treasuries that they gobbled up when the dollar was strong, and loses their biggest export market.
In the short term, both nations suffer. In the long-term, the US benefits.
I was under the impression they held U.S Treasury bonds.
For how long? China has a plan that is pretty obvious.
That little comment probably shaved a couple of percent off the existing value of their currency reserves.
This could also help solvesome of our mortgage and consumer debt load problems. Nothing like devalued currency to ease debt burdens. The stock brokers jumping out of windows would be collateral damage.
From the nation that gave us Sun Tsu, China sure has an impressive history of using their stick. NOT.
And how. There goes the Chinese manufacturing industry and the profits that hold their new ruling class afloat. Make my day.
So I borrow a twenny from the guy and give him an IOU. He sells the IOU to another guy for a dime. That other guy asks me for the twenny. I give it to him. How did I lose in this?
“He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.”
Please don’t tell me that ‘choose’ is going the way of ‘loose.’
declare the treasury notes held by them to be null and void due to their actions.
That’ll but a crimp in their plans.
Try telling that to your mortgage company.
Let them do it. And then lets us close our ports to their crap in retaliation and laugh as the millions of unemployed across China riot and overthrow the filty old men who enslave them.
And this from a country that puts poison into dog food, medicine, toys and whatever and then sells it to the U.S.
Oh, the horror!
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