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You do know that prices can be changed?
First of all, if China would choose to dump their USD reserves for EUR it would theoretically be perfectly possible. Why wouldn't it? They just dump it in Forex markets and watch how low the dollar will drop before the order is completely filled.
Whispers of “conspiracy” have inevitably arisen inside China. Wang Yuanlong said that he would not entirely rule out the possibility that the US had purposely promoted USD depreciation, as this was much the same as repudiating debts. “Developing countries earn dollars by exporting precious resources, while the US only needs to keep the printing presses rolling. The US dollar owned by foreigners is actually a kind of debt,” he said.
Wang Yuanlong thinks China has reason to ask developed countries, the US in particular, to implement more responsible monetary policies. The current global economic slow down and financial market fluctuation are closely related to policies within the US. And since the USD is the global exchange currency, if the US allows USD depreciation, say, as a method of debt alleviation, then other countries will be seriously harmed.
As for whether the US government should bailout its markets, Morgan Stanley's Asia Chairman Stephen Roach declared that fund injections and interest rate cuts would only produce new asset bubbles and further reduce people’s willingness to deposit money in US banks, resulting only in a longer economic recession.
The U.S. Supreme Court's 5-4 decision last Thursday upholding local governments' eminent domain rights to seize property for private economic development purposes should be an alarm bell for homeowners, Realtors and builders around the country.
The US inflation rate is about twice as high as the government’s inflation measures report. In order to hold down Social Security payments, the government changed the way it measures inflation. In the old measure, inflation measured the nominal cost of a defined standard of living. If the price of steak rose, up went the inflation rate. Today if the price of steak rises, the government assumes that people switch to hamburger. Inflation doesn’t go up. Instead, the standard of living it measures goes down.
This is just one of the many ways that the government pulls the wool over our eyes.
....It is that China has decided to stop buying US debt. This means that a huge purchaser of US treasury debt is no longer there. But that is only the beginning of the problem. Last week, when the US Federal Reserve announced that American interest rates would remain unchanged, the dollar immediately dropped to a 2-year low. This means that countries like China, loaded with US debt and thus US dollars, suffered a tremendous loss. China is seeking to protect what is actually a hopeless position by no longer buying into what is obviously a collapsing currency.
China’s decision is the equivalent of the Federal Reserve raising interest rates in the summer of 1929—a act with consequences that will be heard round the world, and will change all of our lives. The US media has the economic consciousness of a flea, so you won't hear much about it, unless the Administration tries to put pressure on China to resume buying. That's not a fix, though, it's just a delaying tactic, and probably only a brief one, because it places the Chinese currency in jeopardy. China has done what it has done because it has no more capacity to absorb US debt. As it is, it has a trillion dollars to sell into a market that is already glutted with dollars.
Originally posted by Karlhungis
reply to post by LostNemesis
I was thinking the same thing. My (albeit limited) understanding was that China and Saudi Arabia were pretty much the last 2 countries keeping us afloat.
I don't know what the end result of this mess will be. It doesn't seem like it will be good for any of us though.
Originally posted by LostNemesis
What does this mean?? Isn't China one of a couple countries that are the ONLY thing(s) left keeping our currency from being -CRASHED-???
If this article is true, could that mean the END? I mean.. it's needed a re haul or whatever. But what more needs to happen at this point, before something drastic will happen??
That may come later.
Originally posted by Rockpuck
I say it starts the day China surpasses America economically.. China purposefully attacking our economy would be considered a declaration of war in America.
They tried it several months ago.. instigated a purposeful "hic-up" sabotaging their own market to observe its effects.. within hours the entire worlds markets where falling in line with what China did..
And if you recall, the American government was far less then pleased..
but seriously a down turn in the USD will mean exports will become more attractive and jobs should increase... right?
Or how about brining back all of the industries that, our governement let go to china or mexico. We don't need material possesions to be happy, so if you could deal with being broke for a few years while Industry gets re-established I think it is something good to get behind.