Dollar is just one piece in the puzzle. It's all fiat!!!Submitted by iehuvihs on Fri, 05/29/2009 - 11:30
When the Chinese, Brazilians or whatever country buys U.S. debt, what do they pay with?
How many Renminbi ( http://en.wikipedia.org/wiki/Chinese_currency ) are issued and put into circulation in China and how many Reais are issued and put into circulation in Brazil.
In other words how is the Chinese government able to buy debt if they need money to invest and spend in their own country? Don't they need to either print or issue Treasury notes of their own money in order to purchase dollars? If so how many Yuan are floating around in the Chinese market? It just doesn't seem like the situation in China and other countries is as stable as they would lead us to believe, since they too do not have real money, but fiat money.