Can someone answer this dollar/China question?Submitted by PatriotsUnderGod on Thu, 03/21/2013 - 12:23
I forwarded this snip of the zero hedge SPLC paranoia article to a world-traveled, former CEO of a boiler-manufacturing company in my family.
"China, our largest foreign creditor, only needs to do two things before dumping the dollar as the world reserve currency – find a consumer market source to replace the U.S., and, spread it’s own currency around the globe to create a viable alternative to the greenback.
Today, China has announced a full blown transition into a consumer based economy and has established bilateral trade agreements with enough developing nations to easily replace the U.S. as an export market.
This past month, China announced a massive “urbanization project” in which they will sell over $6 trillion in Yuan denominated bonds worldwide. China has also surpassed the U.S. for the first time ever as the world’s largest trade market, meaning, the Yuan will now be more sought after than the Dollar as a global trade mechanism.
The Chinese are nearly ready to dump the dollar, causing an international chain reaction that will brutally devalue our currency."
I said, is this true?(he reads the WSJ daily, he agrees the Congress is reckless on spending, and that Obama told everyone EXACTLY what he was going to do both times he ran for President).
He responded; If you held 6 trillion in US debt, why would you want to devalue it?
To which I said: " What am I missing? We're going to pay them back with inflated dollar, aren't we?"
And he said: Of course but why would they inflate it more?
So China is already aware we've ripped them off, perhaps even that we did it intentionally...so what is the REAL situation? We're gonna default, right? We'll just repudiate the debt...isn't that the crisis?
I'm just trying to get a grasp of what will happen and when; and I seek knowledge from older people who have "played the game"(selling boilers on the world market, where government contracts are just as good as any other contract)...I'd also hedge to guess, our collapse will not be his problem; he retired 6 years ago...