posted on Apr, 25 2011 @ 10:46 PM
reply to post by LDragonFire
Interesting story.. horrible link. I tend to never trust anything that wants me to pay "to survive"
Edit to say: The deals are, imo, just between Russia and China and their bilateral trade, so thus, the decline in the Dollar is completely miniscule
and won't even be seen. If it were to spread to other nations, it's concerning.. but China will still have to buy in dollars oil from the ME, and it
will still deal in Dollars with the US.
And assuming China decides it doesn't want our dollars and trade collapses.. what's the worst to happen to the US? Our trade deficit declines? We
use anti-inflationary methods like reducing the currency base etc?
China holds 2.45 trillion in US assets. The Federal Reserve created nearly 14 trillion in credit, backstops, bailouts and direct injections of
liquidity in the span of 2 years. If the Federal Reserve were to scale back it's QE methods by 2 years, it would redact the entire Chinese holdings.
China, imo, isn't that much of a threat. It was rumored that right before Russia fell they attempted to use a massive store of cash reserves and
equity assets to tank the US stock exchange, but their entire holdings only accounted for several hours of typical equity exchanges in cash value.
China Likewise. They got a lot of cash, but they can't yet exist on their own.. and they hold a lot of US dollars, but in the large scheme of
things.. it's really not that much.
edit on 4/25/2011 by Rockpuck because: (no reason given)