Jump to content
House Price Crash Forum
A:gent W00

China Threatens 'nuclear Option' Of Dollar Sales

Recommended Posts

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Blog - Dollar to collapse?

Fistful of dollars - China's trade surplus reached $26.9bn in June

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

FULL ARTICLE.

Share this post


Link to post
Share on other sites
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Blog - Dollar to collapse?

Fistful of dollars - China's trade surplus reached $26.9bn in June

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

FULL ARTICLE.

Link is faulty, any chance you could fix?

Share this post


Link to post
Share on other sites
He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

'Hit Fan' would've been his name without the spelling mistake

Edited by Saving For a Space Ship

Share this post


Link to post
Share on other sites

Thanks dude ;)

FULL ARTICLE HERE

or this one! :ph34r:

We are riding the knife edge between hyper-inflation and deflation. This story highlights the hyperinflationary risk. The destruction that can be seen in the mortgage/housing markets is embodiment of the natural deflationary forces that are present at this point in the Kondratieff cycle. I'm betting that the deflationary forces will win out but this story sends a chill down my spine. Is there any historical precedent that can serve as a guide in this case? It would seem to me that the US is in a very unique position historically.

Edited by A:gent W00

Share this post


Link to post
Share on other sites

Yeah, if the Chinese dumped just 2 or 300 billion dollars of their reserves it would cause the dollar to fall off a cliff. I can't believe that other countries wouldn't follow suit rather than watch their reserves fall in value and Japan is in no position to respond to this, I guess they're running around like headless chickens now.

Share this post


Link to post
Share on other sites

US would be insane to impose trade sanctions against China at the moment. Scary thing is they are probably mad enough to do it.

Given that most dollar pegged currencies are feeling the inflation pinch and then some, If China bail you can kiss the dollar goodbye as you watch em all scramle for the exists.

No Oil = No power

No Power = No Production

No Production = No Jobs

US have played all thier aces in the middle east, I would expect south american oil producers to come heavily into the spot light in coming months with no dirrect US involvement (excluding overwhelming air power) all safely out of the reach of Russian and Chinease interferance.

Share this post


Link to post
Share on other sites
Guest An Bearin Bui
Thanks dude ;)

FULL ARTICLE HERE

or this one! :ph34r:

We are riding the knife edge between hyper-inflation and deflation. This story highlights the hyperinflationary risk. The destruction that can be seen in the mortgage/housing markets is embodiment of the natural deflationary forces that are present at this point in the Kondratieff cycle. I'm betting that the deflationary forces will win out but this story sends a chill down my spine. Is there any historical precedent that can serve as a guide in this case? It would seem to me that the US is in a very unique position historically.

Niall Ferguson, the Oxford historian, was on BBC World's Business Daily programme this morning (8:30am) comparing the situation of the US to that of the Ottoman Empire in the late 1800s. Under Abdulhamid II, the empire borrowed heavily from European powers (the booming industrial economies of the day - back when the UK had an economy to talk of) to engage in ambitious wars of status against Russia and in the Balkans, as well as to allow development at home and raised standards of living. He compared this to the US trillion dollar deficit, wars in the Middle East (ironically for the heirs to the Ottomans) and their desperate flogging of assets to sovereign wealth funds to try and avert the debt implosion.

Well, I guess we all know what happened to the Ottoman Empire after the First World War...

http://en.wikipedia.org/wiki/Ottoman_Empir...E2.80.931908.29

Share this post


Link to post
Share on other sites
US would be insane to impose trade sanctions against China at the moment. Scary thing is they are probably mad enough to do it.

By the same token, the Chinese government (who need rising prosperity for political purposes) would be insane to destroy the US's ability to buy their stuff. That's why they're so keen to control the exchange rate ... and dumping the dollar is plainly not going to achieve that goal.

Which is not to say they will never dump their dollars, just that I do not believe it is in their interests to do so yet. It is definitely in America's interests to see a more competitive exchange rate though; the longer America allows the status-quo to persist, the worse their position will get.

Share this post


Link to post
Share on other sites
By the same token, the Chinese government (who need rising prosperity for political purposes) would be insane to destroy the US's ability to buy their stuff. That's why they're so keen to control the exchange rate ... and dumping the dollar is plainly not going to achieve that goal.

Which is not to say they will never dump their dollars, just that I do not believe it is in their interests to do so yet. It is definitely in America's interests to see a more competitive exchange rate though; the longer America allows the status-quo to persist, the worse their position will get.

Completely agree with you, infact, how has it been allowed to go on this long? Chinease are well placed to buy up masses of commod production with thier dollar reserves.

And once you control supply?

Given global inflation, who's population will crack first, those with AC, big cars and large debts and freedom of speach that can afford a drop in living standards, or those that work for $5 a day and only risk getting gunned down if they don't have enough food to eat? Sounds extreme, but I can't help thinking we are looking at a Mexican stand off.

Share this post


Link to post
Share on other sites
Given global inflation, who's population will crack first, those with AC, big cars and large debts and freedom of speach that can afford a drop in living standards, or those that work for $5 a day and only risk getting gunned down if they don't have enough food to eat? Sounds extreme, but I can't help thinking we are looking at a Mexican stand off.

The very question I had in mind when I wrote my post. The Chinese have less margin for error IMO (tell the new/aspiring middle classes that the deal they've been promised is off and see what happens). On the other hand, the Chinese have more experience of, shall we say, controlling their population.

We will be living in interesting times as this Mexican stand-off resolves itself ... the music boxes are playing, but who has bullets in his gun? :ph34r:

Share this post


Link to post
Share on other sites
The very question I had in mind when I wrote my post. The Chinese have less margin for error IMO (tell the new/aspiring middle classes that the deal they've been promised is off and see what happens). On the other hand, the Chinese have more experience of, shall we say, controlling their population.

We will be living in interesting times as this Mexican stand-off resolves itself ... the music boxes are playing, but who has bullets in his gun? :ph34r:

Infact that what makes it worse ;) when you dont have anything you dont lose anything, when you have something you fight for it.

Share this post


Link to post
Share on other sites
Niall Ferguson, the Oxford historian, was on BBC World's Business Daily programme this morning (8:30am) comparing the situation of the US to that of the Ottoman Empire in the late 1800s. Under Abdulhamid II, the empire borrowed heavily from European powers (the booming industrial economies of the day - back when the UK had an economy to talk of) to engage in ambitious wars of status against Russia and in the Balkans, as well as to allow development at home and raised standards of living. He compared this to the US trillion dollar deficit, wars in the Middle East (ironically for the heirs to the Ottomans) and their desperate flogging of assets to sovereign wealth funds to try and avert the debt implosion.

Well, I guess we all know what happened to the Ottoman Empire after the First World War...

http://en.wikipedia.org/wiki/Ottoman_Empir...E2.80.931908.29

good points

Share this post


Link to post
Share on other sites
Yeah, if the Chinese dumped just 2 or 300 billion dollars of their reserves it would cause the dollar to fall off a cliff. I can't believe that other countries wouldn't follow suit rather than watch their reserves fall in value and Japan is in no position to respond to this, I guess they're running around like headless chickens now.

Looks to me like the US authorities are doing a pretty good job of crashing the dollar without any help from Beijing. Maybe the Chinese need to step on the gas and sell those dollar reserves fast while they still retain some value.

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp

China and anyone else can threaten to cause problems with the dollar and US Economy.

All hot air and wind, if the US and dollar collapses they go with it.

The Chinese are not stupid. ;)

Share this post


Link to post
Share on other sites

Without going into any of the detail here the one very impressive thing about the Chinese is there ability to play the game of poker.

They have not showed their hand nor have they played one card yet and yes there is the veiled threats and the speculation (good poker playing).

The longer they take to play a card the more impressed I am.

In fact they may never play their cards a sure sign of the best negotiator.

When the Chinese Premier Wen Jiabao vists oz he goes to Perth, WA the land of Iron Ore not any of the eastern cities. What kind of poker playing manouvere is this ?

This guy below also looks like he is a good poker player as well.

http://www.youtube.com/watch?v=zN42pk7eozk...feature=related

On the subject of poker this guy might have called his bluff

http://www.youtube.com/watch?v=eHhV2LjOZzY

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.