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To: Aussiebabe; TigerLikesRooster
What do you think will happen to the USA dollar and the stock market in the USA if the central bank of China is forced to dump on the market all of this financial “paper” denominated in US dollars?

Interest rates will spike.

The rest of the "funded by helicopter money"-based industries and businesses in the U.S. will collapse.

The dollar will fall.

The yuan will rise.

The arbitrage offshoring of jobs to BRIC will come to a screeching halt.

China will suffer massive unemployment *and* inflation (paradoxically, since there is not enough of a middle class in China to afford the goods they produce for export, nor enough of an infrastructure in terms of existing homeowners, etc., to have a need for all of the items they are producing for the U.S.).

And China will either revert to Communism or Fascism, and seek military expansionism to seek to distract the populace from the failures of their dictators.

Look out Russia, Austalia, and (god forbid, and due to its land and fresh water) Canada.

Cheers!

15 posted on 09/05/2008 4:38:10 AM PDT by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: grey_whiskers

Bingo!


16 posted on 09/05/2008 4:42:52 AM PDT by Aussiebabe
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