Meltdown of U.S. Dollar Underway as China Dumps the Currency

China and the U.S. are partners, no matter what anyone says and for the foreseeable future, they will remain partners even though China has to hold so much U.S. currency.

The Chinese know that Americans buy their crap. The Chinese know that out of all the countries in the world that have shown any national stability, the U.S. is the only one that would oppose putting up trade barriers to China for any internal Chinese issue.

The existence of the United States as a strong economic partner is of the utmost importance to China. They will do whatever it takes in their power to keep us afloat because they know that if we fall, the rest of the world might start ganging up on China, erecting protectionist trade policies which the U.S. is very unlikely to do, while constantly jabbing at China's human rights violations (which again the U.S. doesn't do very often).

China and the U.S. are like lovers. They have their fights because sometimes one side really can't understand the other side. Both sides have gained tremendously in their relationship though and would rather pick someone else to screw over than each other.

"to China. They will do whatever it takes in their power to keep us afloat because they know that if we fall, the rest of the world might start ganging up on China, erecting protectionist trade policies which the U.S. is very unlikely to do, while constantly jabbing at China's human rights violations (which again the U.S. doesn't do very often)."

And there is the big fairytale. I guess China would never become self-sufficient and start throwing wieght around once the military is built-up to a point of confident contention.

Use ya and lose ya. China's creed. It was Japan's creed before WWII.

Here is the deal Maybe. everyone should watch this video about the Mayan Calendar, it is long but it just may bring some sunshine to your window. accordingly to this, those that seemingly control the world and our monetary systems could be doing exactly what they are suppose to, yo understand this it's important that you watch the video.

I think no matter how we look at this, no matter from what angle , we are headed for the ride of our life's.

Best we can hope for is to be prepared, keep an open mind and follow your gut instincts on this one, it seems the systems in place are to far gone to be fixed, we could be beginning a new way of life, in some ways this might be the best thing that ever happened, it will be like wiping the slate clean and starting over, as you are aware and prepared you should do fine. Truth is power.

"Truth does not cease to exist simply because it is ignored"

Now for the videos, 3 hours in all, but I think you'll find the time well spent.
Enjoy....

The Mayan Calendar Comes North 01
video.google.ca...


The Mayan Calendar Comes North 02
video.google.ca...

Ya, sure! Just what I always wanted, to be ruled by an elite and have chips put into me. Keeping track of us wherever we go and whatever we do. I guess we would be allowed to shop at ChinaMart, and even get on the Internet once and awhile. All monitored of course while the Elite sit at the top and we bust our balls working for them.

Yeahp, sounds like a Mayan prophecy. I guess I should watch Apolcolypto again.

reply to post by Agit8dChop


It's more than very significant. It's pivotal. This is the sound that the US economy makes when it drops.

reply to post by jetxnet


I think you are correct. The problem is that I am sure that our government is aware of this as well and I don't think they are going to just let it happen. They will try to keep China from doing that through subterfuge at first but if that doesn't work, then it could be all out war. Sometimes I wonder if the food crisis is a means employed by our government to slow down China a bit?

It is a very GOOD thing that the dollar is falling in value.

It drives up the costs of imports, so more U.S. made things will be sold both here and abroad. Over time, this will result in more jobs hers, and profits that do not flow to foreign countries.

As the dollar decreases in value, all U.S. manufactured items cost less in the international market. Our exports rise in value.

So, oil from foreign lands cost more. Big deal, our costs for gasoline are still cheap compared to most of the world. And, if we keep those high prices, the environmental kooks will lose their power, we will explore for and drill for more domestic oil, and solve the problem.

I am glad to see China dumping the dollar. It makes all of their cheap crap a lot more expensive.

Buy American, and those factors won't affect you very much at all.

Buy foreign, and pay the price of disloyalty.

Originally posted by AnAbsoluteCreation
Don't forget that CHINA needs USA to continue importing their products, which help keep China's growing economy stable.

China needs USA as much as USA needs China. They both know it, so they have resorted to playing games.
AAC

That, and so many of these discussions occur in a vacuum that discuss maybe economics, perhaps politics, and they don't go much further than that. Politically, China hates us. Economically, the world hates us even though they have to deny that anyone ever agreed to Reagan's plan of forgiving our debt in exchange for our military might. That doesn't make it right but it helps shed light on how we got into the current mess. Reagan was ten times the disaster Carter was, and we're still suffering from the senile old actor's bumbling. May future generations insist on wiser stewardship.

Remember Russia's condemnation of our invasion of Afghanistan? Hi pot, I'm the kettle; did you realize you're black?

Not to mention that China has grown as an industrial nation at their own peril. Just as economics doesn't occur in a vacuum, neither does industrialization. I'm sure some of you have seen the bumper sticker before: "No Farms, No Food." Turning fields into parking lots in a famine-prone country? Yeah, that's a good foundation for a new world power! Well, kids, the reality is that there's a good chance that China will have food riots by the time the Summer Olympics start.

And India? Their middle class becoming more affluent has actually put them in great peril. With greater affluence comes a desire for products such as cars and a chicken in every pot, and the delicious spices that go into Indian dishes, and that latter has led to less food crops and more animal ag. With it has come the joys of increased disease, less land for food crops, and MORE starvation. Thousands of farmers have committed suicide due to poor crop yields due to disease striking wheat, rice, and so on.

Further, China is now the number one polluter and India right behind them. If climate change is indeed human-caused, and if that's what's causing the land masses to turn to desert, this is leading to an even greater disaster. I'm thinking that if nothing changes, we're talking about billions dead without ever firing one nuke, gun, or anything else--we'll all just starve.

And it could be, and would be even greater if no one was taking action. But just beyond MSM is evidence that the industrialized nations know the score and are taking action. Will it be fast enough? Probably not.

If Whitley Strieber is right about the role of "alien influence" then they better get their butts in gear and save us from ourselves once again.

If the early indicators are right, we seem to be backing off from extreme globalism, and more toward sustainable practices. Consumerism in America is dropping on its own, thank God, and our dependence on foreign oil is dropping as well. It won't happen overnight, and it may be too late, but the wheels are in motion. Some of it is due to economic necessity but quite a few people I know are starting to realize they don't need all that crap they're accumulating. May that trend continue.

America has been dependent on the world for, well, its entire existence. If we humble ourselves and remember that, we'll be far better off. Once the current leadership is gone, things will change. I hope to God it will be for the better.

EDIT: Also, Europe is suffering from an overvalued currency. Our country has asked China to stop propping up the dollar as much. If China starts buying into the Euro, it could only be to ensure the ruin of ALL us round-eye devils.

[edit on 19-4-2008 by regeya]

Originally posted by OldMedic
It is a very GOOD thing that the dollar is falling in value.

It drives up the costs of imports, so more U.S. made things will be sold both here and abroad. Over time, this will result in more jobs hers, and profits that do not flow to foreign countries.

huh ??

about the only 'manufacturing' the USA has to export are:

WMDs, farm machinery, commercial Aircraft...
all the rest of the industrial manufacturing base has been sent Offshore
over the decades....


And In the recent reversal of the Boeing Aircraft order, in favor of the EU Airbus aircraft, which was probably fashioned after the EU-USA central bank agreements recently enacted...
so several hundreds-of-million$ are taken off the USAs forward looking employment and earnings statistics.

which leaves Caterpillar, with their farm & C.E. & mining equipment
as a source of USA Exports !
and the ever profitable WMDs like fighter jets/stinger & cruise missiles/landmines for the USAs weak-dollar-sales you seem to want.

Oh yes, the USA will also sell nuclear generating plant plans to all those
3rd worlders as long as 'we' control the fuel rods & maintenance protocols--- which makes them forever in debt to the USA and potentially will be
required to accept a standing troop presence on their soil, for 'protection'

Partially related: I am wondering why the gold price dropped quite a bit again yesterday.
As if the price reaching 950 came too close to the psychological 1000 barrier again so that it needed to be shot down.

This is just a feeling though, anyway with some founded/insightful comments?

The current "crisis " can be looked at more than one way....
First, China holds huge ...over a trillion and counting,....
So they do not want deflation of the US dollar to occur while they hold the bag.....Neither do the shieks...
Secondly, how many US companies have invested in Chinas boom?what stake does the western financial elite hold in the Chinese economy?
Look at J A Pan and company,
they have a surplus economy and a modern work force and workers to match.
But the base money, the major banks the big manufacturers, are all heavily invested in by the large US corporations....
If we do bad, and they do good, the big guys smile,
and conversely if they go down, and we go up, the big guys snmile anyways...
Japan and many oither countries the US has assisted over the decades, S Korea,Taiwan, and many others....
still does not own its own industry and money supply.....ergo
Till the international nature of corporate structures is regulated, and watched to transparency, well have the samo samo ad infinitem....
The mighty USA is slave to the same international banking elite as everyone else...
I am sure whatever happens will be orchestrated to furthur the aims of the likes of the Rockefellers of the world,and not the little people.
The milking of the pension funds of many many Americans is in progress....
By the time this all settles down, even larger percentages of the money supply, and the real wealth of the world will be in the hands of very few people.
China too has its role to play in the world financial money grab thats going on....
whether that role will be as a spoiler to the US economy or not.
Till their money is safely in other currencies, or they stop advancing credit to us(see trade balances)we can probably expect her to back up the dollar to a certain extent, or loose majorly on their investment in America.
bergle

Here is what I posted in a separate thread, I think it brings up good points that people have been overlooking in this very thread.

You all have been listening to too much of China's propaganda that is making its way into the U.S. media. China is using propaganda to try to control U.S. economic and foreign policies.

Deessell,

Lets post the facts again, since you are unable to do so.





Also, China owns very little U.S. debt as a percentage of the GDP. China only owns less than 6% of all of the U.S.'s outstanding debt.
U.S. Treasury website:
Also, the debt is not at historic levels as a percentage of the GDP. Also, the debt to GDP ratio is currently declining. And many other first world countries have far greater debt to GDP ratios.



If China had owned a lot of U.S. debt then they would have drove up the price of treasury securities (bonds, etc). That didn't happen. Currently the price of treasuries have been increasing because people are taking their money out of the stock market and investing in treasuries.
Many U.S. investors want China to sell off the U.S. debt because in the long term it will decrease the trade deficit (improve the stock market, boost home prices, increase consumer spending, increase job growth, etc.)

Why does china buy so much US debt? China only buys our debt to devalue its currency so it can create an artificially created trade deficit. So china buying US debt is in Chinas best interest, if china wants strong economic growth, that is.

Embarrassed yet? I am pretty much thrashing your original "arguments." Though i will not continue to beat you when you have been thoroughly beaten down.

About the "Micky mouse dollar." Japan is thinking about selling off its yen to boost the value of the dollar so Japan can sell more Japanese cars in the U.S.. "Japan sold the yen on the four occasions since 1995 when the currency approached 100 to support exporters including Toyota, the world's second-biggest automaker." ...
-Bloomberg news.

Contrary to what most people think, a weak dollar is not bad for America. It helps U.S. automakers and manufacturers. It also reduces the trade deficit which reduces unemployment and the national debt. The dollar is fine. The falling dollar helps the economy.

A weak dollar does not make foreign car makers happy. Each time the Japanese yen increases to the dollar by one yen, then Toyota's profits drop by 35 billion yen

Global economics 101. The country with the weakest currency wins. And the country with the most innovation (the U.S.) keeps alive the countries that only know how to copy ( through the use of a devalued currency) .

The countries with the weakest currencies have the fastest economic growth. Japan purposefully devalued its currency for decades to gain U.S. marketshare in our automotive sector and our electronic sector.

China and India are currently devaluing their currencies. China had over a 10% GDP growth rate last year. And Russia's devalued currency is hurting the EU steel mills.

The key to America's future is spending money in research and development and at the same time preventing other countries from artificially devaluing their currencies. Those actions alone will increase job growth, improve the standard of living, reduce the need of social programs, reduce the national debt through tax revenue growth, etc..

In the long term a low dollar is actually good for America (as long as other countries don't artificially peg the dollar). A low dollar decreases the trade deficit, improves the economy, and increases tax revenue to lower the budget deficit. China has been enjoying the benefits of a weak currency for a decade. That is the only reason why China is doing so well. It actually sucks at productivity.

China Is Against Free Trade. They are taking what we are allowing. I am in agreement that something needs to be done about this.


Additionally
How is it you can say that China does not need the US, when China needs the US in order to devalue its currency, which makes china lucrative to begin with? Chinas economy is totally reliant on the US and EU economys, it is not a self sufficient first world economy, it is a third world economy with 1.3billion people and a crappy infrastructure. I am seeing things quite clearly. I happen to know the facts, whilst many ill informed illiterates spout the latest fashion fad.

And More freedoms? Tell that to the Tibetans who have had their land invaded ILLEGALLY and ruled by an iron fist for 50 years.

Also tell me why China feels the need to filter what its people can see, and cannot see over the internet?

I will take statistics over your ill informed, maligned opinion.

reply to post by West Coast


That's all fine. I used to buy the same crap. My apologies to the members who were correctly berating me for my ignorance.

Your basis of 9 Trillion is ridiculous. Funding Medicare, Medicaid, Social Security, etc. is in excess of 60 Trillion. We have banks in this country that hold TEN TIMES that amount (9 Trillion) in 'derivatives' based on Real Estate Inflation. That's 90 Trillion, or TWICE global GDP, with ONE bank! Hate to break it to ya, but real estate is DEFLATING, and with it that 90 Trillion at JP Morgan!

The Govment will not let these banks fail. Can you imagine trying to print your way out of tens of Trillions? You may want to study Weimar and early 90's Yugoslavia to see what inflation of a money supply can do.

I haven't read the entire thread but here's a thought...wouldn't the complete collapse of the US dollar set the stage for the introduction of the speculated Amero (US, Canada, Mexico) dollar?

Hey if China bought over a Trillion dollars worth of US debt when the dollar was strong and highly valued and the notes they bought are coming due does it not make sense to devalue the dollar just prior to the notes maturing in order for the Federal Reserve to screw China into the ground by the loss of the value of the US dollar?

The debt China holds has been reduced in value screwing China in the long term.

reply to post by JCM


Yeah, that's works great. Once!

Problem for us is we need them to continue funding our deficit spending on the order of 60 Billion a month. It would be kinda like telling your credit card company that you're going to start paying them in monopoly money. Sure, you feel great about it and pat yourself on the back for being so smart. But your budget is no where near balanced and without additional Credit you're screwed. Cutting off our nose to spite our face.

Not only that. We don't just effect china when we print money. We effect any country who holds Dollars. We are already seeing consequences for the inflationary practices of the FED around the world. Russia also holds some 800 Billion worth of our debt. The effects of 2 Trillion of our debt being sent back here on top of the Hundreds of Billion being printed would not be good.

An attack on Iran could spark this kind of economic warfare. It's awfully hard to project power when your homeland is in disarray. While I'm sure that there are some here who won't understand that, be assured that our enemies do! And if you think the Russians and Chinese are our friends, I'm selling some Ocean Front property in Montana. Just u2u me and I'll tell ya all about it.

Originally posted by HimWhoHathAnEar
That's all fine. I used to buy the same crap.

So you invested your knowledge in new crap, i see.

Your basis of 9 Trillion is ridiculous. Funding Medicare, Medicaid, Social Security, etc. is in excess of 60 Trillion.

A highly speculative number, that if were true, would never be paid off.

In those same regards, china, which is a country that many seem to think holds the US buy the balls, is in even worse shape in those same regards, and they have a population that is aging rapidly.

We have banks in this country that hold TEN TIMES that amount (9 Trillion) in 'derivatives' based on Real Estate Inflation. That's 90 Trillion,

An even higher speculative number. Or are you basing this off of total net worth? If so, then you cannot possibly be serious about that number.

As for the 9 trillion in debt, as a percentage of GDP, our national debt is lower than it was at any time since 1972. The US is much better off in these regards (debt as a percentage of GDP) than many other first world nations.

Please, link a source that indicates the US is $150T in debt.

The Govment will not let these banks fail. Can you imagine trying to print your way out of tens of Trillions? You may want to study Weimar and early 90's Yugoslavia to see what inflation of a money supply can do.

How does the same apply? you lack the basic fundamentals of economics.

And as my post indicates, China does not hold the US by the balls. Atleast with Japan, you could make a case, however, the same is not true for china.

[edit on 20-4-2008 by West Coast]

The US Dollar has hit the skids, and soon shall we hide the Kids.... Saudi has already ran to the Euro as others who cannot duel... Our own Fund advisor traders of doom are pushing China stocks and foreign market investments it all ends soon... The Rats are fighting to get off this Turd.... Toil and Grumble I see a bubble, Soon it will rain Hell While Destructions Gains.... There are those to blame but none will, Cowards of new these beast in blue... Time will tell but none to spare me thinks its time to just prepare, justice prepare, Just us Prepare... Heed these words for they are from towns with plenty and brains of none.... Mark my word no time to spare, they come from the county they come from the air, Men of white who do not play fair, birds of burden Will cross your lair, time for plenty but none to spare, Run poor man run get your gun its one to many odds are none, secrets disclosed but none to hear only fright and Folsom is to fear, I hear a voice should I trust thru the mist and wanderlust, "Are you ready I think not...For I know not".

reply to post by West Coast


I'll take the comptroller generals 'highly speculative numbers', as you put it, over yours any day.
www.cnn.com...

JP Morgan had 77 Trillion before they absorbed Bear Streans 13 Trillion.
www.rense.com...

As of June 2007, foreigners owned $6,007bn of long-term US debt. (Equal to 66pc of the entire US federal debt). The biggest holdings by country are, in billions: Japan (901), China (870), UK (475), Luxembourg (424), Cayman Islands (422), Belgium (369), Ireland (176), Germany (155), Switzerland (140), Bermuda (133), Netherlands (123), Korea (118), Russia (109), Taiwan (107), Canada (106), Brazil (103). Who is jumping ship?

The Chinese have quickened the pace of yuan appreciation to choke off 8.7pc inflation, slowing US bond purchases. Petrodollar funds, working through UK off-shore accounts, are clearly dumping dollars amid rumours that Gulf states - overheating wildly - are about to break their dollar pegs. But mostly likely, the twin crash in the dollar and US agency debt reflects a broad exodus by global wealth managers, afraid that America is spinning out of control. Sauve qui peut.

The bond debacle last week tallies with the crash in the dollar index to an all-time low of 71.58, down 14.6pc in a year. The greenback is nearing parity with the Swiss franc - shocking for those who remember when it was 4.375 francs in 1970. Against the euro it has hit $1.57, from $0.82 in 2000. Against the yen it has smashed through Y100. Spare a thought for Toyota. It loses $350m in revenues for every one yen move. That is an $8.75bn hit since June. Tokyo's Nikkei index is crumbling. Less understood, it is also causing a self-reinforcing spiral of credit shrinkage throughout the global system.

Japanese investors and foreign funds are having to close their yen "carry trade" positions. A chunk of the $1,400bn trade built up over six years has been viciously unwound in weeks. The harder the dollar falls, the further this must go.

It is unsettling to watch the world's reserve currency disintegrate. Commodities from gold to oil and wheat are taking on the role of safe-haven "currencies". The monetary order is becoming unhinged.

I doubt the dollar can fall much further. What is it to fall against? The spreading credit contagion will cause large parts of the globe to downgrade in hot pursuit - starting with Europe.

Few noticed last week that the Italian treasury auction was also a flop. The bids collapsed. For the first time since the launch of EMU, Italy failed to sell a full batch of state bonds.

The euro blasted higher anyway, driven by hot money flows. The funds are beguiled by Germany's "Exportwunder", for now. It cannot last. The demented level of $1.57 will not be tolerated by French, Italian and Spanish politicians. The Latin property bubbles are deflating fast.

The race to the bottom must soon begin. Half the world will be slashing rates this year to stave off credit contraction. The dollar will have a lot of company. Small comfort.

SOURCE: www.telegraph.co.uk.../money/2008/03/17/ccview117.xml