China's gonna dump the U.S. dollar.
BEIJING (Reuters) - The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.
The People's Daily is the official newspaper of China's ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.
Its pronouncements do not necessarily directly voice leadership views. But the commentary, as well as recent comments, amount to a growing chorus of Chinese disdain for Washington's economic policies and global financial dominance in the wake of the credit crisis.
I wonder how this will affect the Monday Markets ? Continue reading ........
http://www.reuters.com/article/forexNews/idUSTRE49N1XX20081024
China is a slave state
this conclusion requires the agreement of all the countries in the world.
Do you want to live in China? I don't think anyone else wants to either.
So how are they going to be the new reserve currency?
We buy half of the stuff they make why would they want to screw that up? All their slaves would be out of work. The slaves would revolt and then the yuan wouldn't be such a great currency huh?
Reuters fear message...what else it new.
Unify
They don't want to screw it
They don't want to screw it up. They want their OWN people buy up half the stuff it makes rather than be indebted to a bankrupt govt like the US.
You can already see them making the move towards this per this and many other articles:
http://biz.yahoo.com/ap/081012/as_china_economy.html
You say, "So how are they going to be the new reserve currency?"
The exact same way that the US dollar became the reserve currency as outlined here:
http://www.financialsense.com/editorials/petrov/2004/0902.html
Until you can grasp what is outlined here:
http://www.theviewfromthepeak.net/newsblog/2007/03/crash-pro...
you probably are going to keep promoting the idea that somehow the US is going to continue down its path of prolifigate debt based consumption with a false service sector economy while the rest of the planet just sucks it up and carries on providing the necessary capital to the US for that to continue. That just ISN'T going to work.
yes, China will take a massive hit to its economy by dumping dollars but that is an inevitability at this point. The US is bankrupt and even our own GAO says that our way of life is unsustainable.
a slave state ? sounds familiar ?
this is what the US is becoming more and more every day.
~Mikael / Peace, love, Light and unity ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Stop the NWO....It's just illumi..Naughty !
Meet the World's New Reserve Currency: The Chinese Yuan
The November summit in Washington could produce some unwelcome surprises which were hinted at by Thailand's Deputy Prime Minister, Olarn Chaipravat, who told Bloomberg News: ,
"The message of this initiative is for China to consider whether or not China would open up its banking system and allow the strongest currency in the world, which is the Chinese yuan, to be the rightful and anointed convertible currency of the world."
Surely, the present financial malaise which has its roots in Wall Street and at the Federal Reserve, has demonstrated that the dollar must be replaced as the world's "reserve currency" and that America must be deposed as the de facto steward of the global economic system. Leadership implies responsibility and the US must be held to account for its failings. It's time for a change.
http://www.informationclearinghouse.info/article21090.htm
I see no need for China to dump dollars if "dumping
dollars" is intended to signify some massive sell-off of U.S. debt instruments that they currently hold prior to maturity. One can offer something for sale, but the sale requires a willing buyer in order to complete the transaction. The scale of USD-denominated debt held by China would require a discounting in order to induce other buyers, with access to sufficient investment capital, to provide the other side of such a sale. Is China willing to endure that discount on unmatured obligations?
All that China needs to do, in order to inflict serious pain on the U.S., is to either stop buying U.S. debt or to significantly cut back on their purchases of those debt instruments. With fewer willing buyers of that debt, the yields on those instruments will have to increase (higher interest return - less dollars paid to the U.S. in exchange for acquiring the debt obligation) in order to make them attractive enough for the remaining pool of buyers. Here in the U.S. it would mean that each bond would supply fewer actual borrowed dollars for our deficit-spending politicians while still creating the same amount of debt obligation. In order for them (politicians) to get the same number of dollars to throw away for various dubious projects, an increasing percentage of debt obligations would have to be sold. Other results - higher amounts for debt interest service and an increasingly higher percentage of tax revenue going for that purpose.
_________________________________________
"An economy built on fiat money is a society on its way to ashes."
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"An economy built on fiat money is a society on its way to ashes."
Doesn't China hold on to
Doesn't China hold on to trillions of dollars in U.S currency reserves as well? Could they not dump this by buying up U.S assets?(like businesses, property, etc...)
Or am I mistaken and China only really holds onto dollar denominated debt-instruments? (bonds etc...)
Perhaps it's both?
"My theories explain, but cannot slow the decline of a great civilization. I set out to be a reformer, but only became the historian of decline."
- Ludwig Von Mises
"My theories explain, but cannot slow the decline of a great civilization. I set out to be a reformer, but only became the historian of decline."
- Ludwig Von Mises
By debt instruments, I was referring to such things as
T-Bills, which produce their income, for the holder of the debt, at some future point in time. Certainly it is the case that cash assets held by China (and Japan and India and Russia and etc) can be used, and have been used and are currently being used, to buy hard assets in the U.S. as well as equity stakes in various U.S. corporate institutions. U.S. politicians, with their well developed sense of smell, have also picked up the scent of that money as well.
_________________________________________
"An economy built on fiat money is a society on its way to ashes."
_________________________________________
"An economy built on fiat money is a society on its way to ashes."
Probably both. they could
Probably both. they could buy up everything
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"So this is how liberty dies... with thunderous applause."
* * * * * * * NEW R3VOLUTION HIP HOP TRACKS!! * * * * * * *
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The dollar is insured by several thousands of nuclear weapons
Gee, financial saber rattling by the Chinese causes nuclear saber rattling by the current emperor and his court via mr gates.
what a shock.... /yawn/
On the other hand, China has
On the other hand, China has all the thermonuclear weapons it needs to destroy America, and has since the Clinton Administration. All you'd ever need to destroy any civilization would be twenty ICBMs delivered accurately to population centers. And most civilizations would collapse with one-third that many hits.
Being intelligent Orientals, I'm sure they realize the US no longer has any strategic nuclear superiority. So do the Russians, who have outclassed us in numbers of warheads for 25 years (and that's why they fret so much about ABMs and missile defenses instead of our warheads).
SUPPORT OUR FOUNDERS' AMERICA
Support the Constitution of the United States
SUPPORT OUR FOUNDERS' AMERICA
Support the Constitution of the United States
Ummm...
Ummmm they might be able to effectively 'destroy our civilization' but we have enough nuclear ordinance to obliterate 90% of their populace, and render their entire country unusable for 50 years.
Plus our central government's hand would be strengthened. A wave of patriotism would sweep the country and the major socio-economic issues currently being discussed would take a backseat to beating the living daylights out of whoever had the balls to hit us. (I know I would whole heartedly support reducing their entire country to ashes... and I'm generally pacifistic.)
As bad as China's govt might be...
...they've never used atomic weapons on any target. Neither have the Russians.
The US govt has. Twice.
Which country's government is the terrorist there? Who's scaring who?
I am not analyzing moral
I am not analyzing moral implications...I'm saying that the Chinese have the power to destroy the US in a nuclear exchange. So I doubt they are scared by Uncle Sam's blustering.
SUPPORT OUR FOUNDERS' AMERICA
Support the Constitution of the United States
SUPPORT OUR FOUNDERS' AMERICA
Support the Constitution of the United States
20 Nukes would not 'End America'...
20 nukes would be a death sentence for a European nation like Great Britain, France, Italy, and Germany. But to put it bluntly, America is too big, most of our military is chilling in other countries, and we have quite a few nukes of our own.
The only thing 20 nukes would get someone is a completely destroyed, severely irradiated country, occupied by VERY hostile American troops.
How exactly does a country dump dollars?
I can see how a country imports and exports products, but how does a country get rid of a currency? Does the country's treasury simply do a currency exchange on the open market? And who would absorb all those dollars that the Chinese would dump?
They can use their US dollars
to buy gold, oil, companies or anything else that has real value. It's actually been going on for a while now at a rate intended not to create a panic. Remember in March when gold was $1,000/oz? And then oil climbed to $150/bbl? These countries have been holding US dollars as a reserve currency and now they are seeing that the dollar has a very bleak future. Those dollars currently residing abroad will eventually come raining down on us here in the USA, where we will use them like company script that loses purchasing power daily. We are becoming the newest Weimar Republic.
This is a bit fuzzy with me
Mr. Schiff does a great job of explaining it, but it takes a bit of study to truly understand.
From my understanding it's
From my understanding it's treasury debt in the form of bonds that would be sold off. If China did it too rapidly everyone would realize what is going on and nobody would buy them so what will most probably occur is a throttling on the purchase of more of that debt at the same time they slowly sell off those bonds. At some point the mainstream would realize what is going on and halt purchasing any more US treasuries and the US would then default on its obligations. Any amount the Chinese would then be holding would become worthless, hence the reason for a slow dumping rather than an all at once type scenario.
Can't see this actually happening *just yet*
Eventually, yes... and I think they are merely "laying the groundwork" right now.
I think their (eventual/inevitable) "dumping" of the dollar will be in the future (six months? a year? two years? -- relatively "soon" in long-view terms anyway).
I agree. It won't be
I agree. It won't be tomorrow, but it will inevitably occur, most probably sooner rather than later.
The dollar
The dollar is up on extreme forced buying by hedge funds that were forced to de-leverage. It is extremely over-bought. Could fall hard and fast when the forced buying is over. So say some of the pundits I follow. Do your own due dilligence.
which pundits are these
which pundits are these Jive? I think they are on to something ;)
VOLVO is taking a 99 % hit right now on it's truck line
http://calculatedrisk.blogspot.com/2008/10/cliff-diving-volv...
~Mikael / Peace, love, Light and unity ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Stop the NWO....It's just illumi..Naughty !
hey sentinel
i love calculated risk.
great site.
good people.
intelligent insights.
solid snark.
better than mustseeTV fo'sho
I have a huge list of reference sites I use
I like this one for up to the minute news casts from around the world .
http://www.thefinancialtube.com/
I go there and just click the watch button and it give only pertinent information on the economy.
~Mikael / Peace, love, Light and unity ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Stop the NWO....It's just illumi..Naughty !
cool thanx
just what i need
more smack
:)
seen this one?
greenspan & the simpsons
http://calculatedrisk.blogspot.com/2008/10/greenspan-and-sim...
i like the casablanca one mo'betta
BEER ( slober ) ..............DOHHH
~Mikael / Peace, love, Light and unity ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Stop the NWO....It's just illumi..Naughty !
http://biz.yahoo.com/ap/0...
http://biz.yahoo.com/ap/081012/as_china_economy.html
combine that with these 2:
http://www.theviewfromthepeak.net/newsblog/2007/03/crash-pro...
http://www.financialsense.com/editorials/petrov/2004/0902.html
and I think it should be readily apparent to everyone what is coming down the pipe concerning china. There is about to be a huge global power and financial shift away from the US and towards Russia/China unfortunately.
I cant believe China would
I cant believe China would do that to us.I mean China and US are buddies. Who else is willing to buy our natural resources and in return give us led filled toys, poison baby formula and dog foods?
-MY OPS ARE BLACKER THAN YOUR OPS-