I had to read the article twice to believe it. This quote sums it all up;

"This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.

Yes, this is worrying news.

This could be China increasing its weight at the APEC meeting.

If Japan starts dumping the dollar then it would be alot of trouble.

Originally posted by Harlequin
If Japan starts dumping the dollar then it would be alot of trouble.

Britain holds the third largest...

so, hopefully we don't see a chain reaction here.

Sadly, we all saw this coming as a possibility after the China product recalls. We are seeing the beginning of the end of non-hostile US-China relations. Next step will be for the US to impose a tariff on Chinese goods and a possible drop in Favored Nation status for Chinese trade. This will cause a massive spike in hostile relations between the United States and our Eastern Communist Friends, both in China and the former Soviet Union.

I'm reading that as of yesterday afternoon, foreign holdings of Treasuries in Fed custodial accounts actually perked a bit after falling for 4 consecutive weeks. On the other hand, foreign central banks continued to reduce their holdings of 'U.S. agency debt'...so in the end, foreigners remained net sellers of U.S. securities (all types). If the debt ratio continues off-kilter, the only fix is the printing press.

Gold this week has more to do with the Dollar than with the Chinese buying 'Lucky Balls', or Indians ramping-up for festival & wedding season. Gold usually gets a seasonal push from Asian holiday buying, but not necessarily a large, sustainable push (see 2006). Higher Gold prices and volatility can dampen Asian holiday buying. On top of this, it has become a pattern to see Gold rise overnight in the Asian markets, only to be bushwhacked an hour or so into the U.S. markets. The economic powers-that-be have a sincere stake in capping the price of Gold as an honest inflation indicator.

What we're seeing this month is a reduction in commercial short-of-gold contracts, a large increase in open interest longs, and Gold ETF's increasing their holdings to record highs. One report yesterday described a short-of-Gold COMEX pit trader wandering the floor in tears...calling for mommy! I wish it were true

Basically, an escallating price of Gold = a vote of no confidence in the U.S. Dollar.

Bazillion$ have entered the system in the last few weeks, and the markets have priced-in a rate cut. How long before this monetary inflation translates to price inflation. Oil is up again, and grain futures recently went parabolic

Wow this trend will cause massive devastation to the north american economy

This is interesting...
I have no doubt China does not trust the US given it's military aggression.
China probably thinks "after the Middle East, are we next?"
So it tries to destabilise (with the help of Russia and maybe a few others) the US economy as a defensive tactic, while stocking up on gold (the original money).

Originally posted by OBE1 If the debt ratio continues off-kilter, the only fix is the printing press.

Quite so. But these days they don't even need to print anything. The Federal Reserve Bank in the USA can just conjure the dollars from the thin air and enter them into bits and bytes.

I believe the actual economic disaster in its fullness will fall on the next President's watch. Should it happen under this President, he has the powers -- mostly arrogated to himself -- to put the USA under Martial Law and turn it into a prison.

Originally posted by infinite
I had to read the article twice to believe it. This quote sums it all up;

"This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.

Yes, this is worrying news.

This could be China increasing its weight at the APEC meeting.

Thats interesting, they wont tell it publicly, but people know it..China could use it as leverage in the APEC meetings.
Maybe they've started this dumping so it has more effect at this moment while the mortgage[credit] crisis is ongoing and the weak jobs report from today. Either way, it'll have its impact..