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China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings

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posted on Apr, 24 2011 @ 11:26 AM
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China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings


All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?


Read more at :

www.zerohedge.com...


Woah - this is a huge bombshell.....if China does this.....

Therefore, when the FED tries to sell bonds, there will likely be fewer buyers (which has been a trend for some time) Fewer buyers will likely result in a decrease in the price of those bonds.

The end result is the FED will have to increase interest rate...which means:

1. dollar will increase
2. stock market is going to get nailed
3 people with mortgages / variable rates are going to get slaughtered.


Going to be a very interesting this summer....hope you are all prepped.




posted on Apr, 24 2011 @ 11:32 AM
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reply to post by MidnightTide
 


WOW!!!!!! This is like a act of WAR.... but why would they tell us this before they do it ?? Everybody will front run this move. Next who wants all those dollars.. Who's going to bid on them ?? This could be saber radling. If not we are so screwed!!!! Hold on to your PMs



posted on Apr, 24 2011 @ 11:38 AM
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The effects of China dropping the dollar is far more reaching than you think, it could trigger a run and a global collapse, however...

The report you linked to is just a blog/post linking to another blog about someone recommending that China reduce her reserves of the dollar. It is not actually happening, well not yet anyway...



posted on Apr, 24 2011 @ 11:57 AM
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Another coffin nail in life as we know it in the US. The state run media can only cover up the collapse we are going to have for so long before it become apparent even to an Obama supporter.

Prepare while you can.



posted on Apr, 24 2011 @ 12:53 PM
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reply to post by PrinceDreamer
 


Still, it just goes to show that the potential of this is getting closer - there will be a point in which this will happen. Nothing that I have seen shows me that anyone in the US government is willing to do what is necessary to reign in their debt.



posted on Apr, 24 2011 @ 01:05 PM
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The Us announces bailouts ahead of thime.
they devalue the debt everyone out there holds

If they announced it that means the Chinese want those that pay attention to know.
By having people buy the yuan knowing that will bouy it up away from the US dollar
and drive the dollar down at the same time...

A case of
devalue what you owe...
take that...in return
I guess



posted on Apr, 24 2011 @ 01:53 PM
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reply to post by MidnightTide
 


I have to agree with you there, I am not American I am British but I realise a collapse of the dollar will not only impact the US, but the whole of the world, the fallout will be terrible. I don't think it is a case of "if" it will happen, just a case of "when"

Just glad it is not yet, but I do worry for my kids



posted on Apr, 24 2011 @ 04:57 PM
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While my time line was off the series of events I illustrated 2.5 years ago is coming to pass almost perfectly.

Believe it or not I didn't count on the government doing what it has been doing. I expected all of this to happen much faster than it has. But here it is.

It's only a matter of time.

Next up is a bond auction failure(a big one). If that happens I'm packing up and headed for the hills.



posted on Apr, 24 2011 @ 10:15 PM
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We fall, China will fall harder. No amount of currency manipulation will make up for the US not buying their cheap goods. Last I heard, we export alot of food their way too. I dont think they could exist without that.



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