Who are they going to sell to?
More nonsense noise. They got to sell TO someone.
At which point we can simply ban their imports and destory their economy.
All right...let’s call their bluff. I’m more than happy to see the price of Chinese goods go through the roof...are they?
This is puffery.
China’s ecconomy is SMALLER than the increase in our ecconomy.
The basic truth is that China now needs the West more than they are needed by the West. They’re getting a crash course in capitalism, and there will be some hard lessons in there.
I make it a habit to avoid Chinese goods. I paid an extra $5 for a knee brace for my son (hockey related) that was made in America.
In fact, the Chinese item was, IMO, inferior in materials and design.
Like it says, the “Made In China” label should be considered a “Warning Label”!
Little green slips of paper are not a sound basis for a monetary system, and it’s going to end up badly.
We should call 100 billion in everytime they pull this bluff. We have the resources.
Threats like this should tell the rest of us how China really feels about us. If we stand up to them, they want to bury us.....or try. What they don’t understand is that the American people can ruin their economy.....or at least have a major impact on it. Stop buy anything from China and see what happens. If they get pissed, so be it. The government in China is strong, their people weak. Our government is weak and our people strong. They don’t understand this.
How about we:
1) tell the Congress to stop messing in foreign policy by threatening China;
2) tell the Congress to reign in spending and allow us to run surpluses starting in a few years (I know, not counting Social Security) so that there will be, over time, less and less bonds out there to be dumped by ANY country;
3) organize a very informal, but steadily growing, private boycott of Chinese goods. Put pressure on stores to stock more American goods, or at least goods from genuinely friendly countries.
IOW, prevent a catastrophe now by not pissing them off, and gradually turn the screws on the Chinese with market forces.
Oh, and if they want a pissing contest, they’re going to get a lot wetter than us. We don’t have to go to the Olympics or buy their crap (and if they collapse the dollar not only will their sub-standard goods cost more, but the average Joe will be royally ticked off). They need us more than we need them, that’s the bottom line.
But in reality, when China holds US currency and US debt instruments, they do not hold them in some value in China. They are held in their correspondent account in a US Bank. If the US Treasury or Federal Reserve had any serious evidence that China was contemplating such a move, the US could block the sale of these assets thus preventing their value from being damaged.
Dan Simon’s commentary in the article is illuminating:
[Quote]
It’s probably true that a massive Chinese sell-off would weaken the dollar and strengthen the other currencies into which they bought. Of course, since the Chinese reserves are so dollar-heavy, the main effect of this rebalancing–aside from making American exports more attractive–would be to reduce the value of the Chinese goverment’s cash reserves.
More to the point, the reason that China holds that huge hoard of currency reserves in the first place is to keep the value of the US dollar up, and thereby maintain the ability of the American consumer to continue buying Chinese manufactured goods. This is an extremely stupid game they’re playing, and they will one day have to figure out a way to quit. But that quitting process will inevitably be at least as painful for China, with its brittle new export-driven economy, as for the US, with its much larger, more self-sufficient and more adaptable economy.
The Chinese “threat” to sell off their dollar reserves should therefore be taken in the spirit of Cleavon Little’s character in “Blazing Saddles”, who, when finding himself surrounded by enemies, responds by taking himself hostage, holding a gun to his own head and threatening to shoot if he’s not allowed to escape. Particularly right now, as the US economy shows signs of succumbing to a credit crunch, the obvious American response to the Chinese offer to let loose a flood of cheap dollars should be (to use another film reference), “go ahead–make my day”.
[Unquote]