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China begins to dump the US dollar for other currencies.

vhx

Golden Member
Jul 19, 2006
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http://www.naturalnews.com/023005.html

Comments by China that it intends to move away from its reliance on the dollar triggered a sharp drop in the Dow Jones Industrial Average and heightened worldwide fears about the U.S. currency's stability. Chinese Central Bank Vice Director Xiu Jian said that his country is planning to shift much of its $1.4 trillion national currency reserve from dollars to more stable currencies, such as the euro or Canadian dollar. After these comments, the dollar fell to record lows relative to other currencies -- the lowest ever against the euro, the lowest in a generation against the British pound, and the lowest in 57 years against the Canadian dollar.

"The big issue on any currency is if its rate of depreciation is so fast that it scares away all capital, and the announcement that we heard from China sort of feeds those fears," said Larry Smith, chief investment officer at Third Wave Global Investors.

China is the world's largest investor in U.S. Treasury bonds and securities, holding more U.S. debt than any country but Japan. Because China's currency is linked to the dollar, the country also maintains a massive reserve of the currency.

But this policy had already begun to shift at the time of Xiu's comments. China has divested approximately 5 percent of its $400 billion holdings in the U.S. Treasury and established a $200 billion fund to help diversify its investments in equities and stocks around the world.

"We will favor stronger currencies over weaker ones, and will readjust accordingly," said Cheng Siwei, vice chairman of China's National People's Congress.
Pretty self explanatory. China is seeking other currencies in which to invest in to ween themselves off the dollar.
 

brxndxn

Diamond Member
Apr 3, 2001
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Can't find it in any of the mainstream media... But then again, you cannot find anything about Iran getting rid of using the dollar for oil, Ron Paul, or anything relevent in mainstream media...

scary, though... What if the dollar completely collapsed?
 
Dec 30, 2004
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Gogo china. We've got some technologies on the horizon that are making me less bearish on the economy in the long run. Soon as we kick our dependence on gas (all this requires is nuclear power and carbon nanotube lined plates of capacitors buildable for cheap) and we're paying for nothing but electricity, is the day gas becomes uber cheap for us and Americans suddenly have millions more in disposable income to dump on imported products and to invest in other technologies. Everybody wants to buy these capacitors and they do it in USD so we finally export something. Militarily enforce production of this to companies operating and selling accepting only the USD so we can get our debt back.

China doesn't want a position of military stability in the middle east anyhow. They're going to make it difficult.
 

blackangst1

Lifer
Feb 23, 2005
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"intend" does not mean "done". For all we know its sword rattling. Even of they do move away from the US Dollar, they will still hang on to our debt. THAT they WONT dump. This really isnt news...yet.
 

Aimster

Lifer
Jan 5, 2003
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The people in the U.S panic too much..

Our inflation goes up and people go wacko. Lots of nations have high inflation and they do just fine.

Plus a weaker dollar is not necessarily a bad thing. It means more people want to buy our goods. We have plenty of goods to sell.

Look what I've done.....
 
Dec 30, 2004
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Originally posted by: blackangst1
"intend" does not mean "done". For all we know its sword rattling. Even of they do move away from the US Dollar, they will still hang on to our debt. THAT they WONT dump. This really isnt news...yet.
Yeah if the dollar tanks they've got to keep their yuan pegged to it otherwise we will stop buying their stuff; tons of chinese are out of jobs, they become unhappy about the government, etc. Dump the USD and the PROC would have an immediate nationwide stabilization issue (I think). We still have the money to blow on imported products. When we don't, start worrying.
 
Dec 30, 2004
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Originally posted by: Aimster
The people in the U.S panic too much..

Our inflation goes up and people go wacko. Lots of nations have high inflation and they do just fine.

Plus a weaker dollar is not necessarily a bad thing. It means more people want to buy our goods. We have plenty of goods to sell.

Look what I've done.....
Plus if inflation skyrockets then the FED will probably increase interest rates like crazy to reign it in, which will bring in tons of foreign investors. Just like what happened in the 70's/80's.
 

babylon5

Golden Member
Dec 11, 2000
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Look at our South America neighbors, their weak currency does magic for their strong economy!!!
 
Sep 12, 2004
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Originally posted by: soccerballtux
Originally posted by: blackangst1
"intend" does not mean "done". For all we know its sword rattling. Even of they do move away from the US Dollar, they will still hang on to our debt. THAT they WONT dump. This really isnt news...yet.
Yeah if the dollar tanks they've got to keep their yuan pegged to it otherwise we will stop buying their stuff; tons of chinese are out of jobs, they become unhappy about the government, etc. Dump the USD and the PROC would have an immediate nationwide stabilization issue (I think). We still have the money to blow on imported products. When we don't, start worrying.
Exactly. When China decouples their currency from the US dollar these kinds of rumors might have some meat to them. Apparently China doesn't believe the dollar sucks enough to make that move though.
 

Deeko

Lifer
Jun 16, 2000
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I really don't care. I will guarantee that this won't hurt me in the long run, no matter what the "THE SKY IS FALLING" psychos say about our amazingly weak dollar.
 

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