China To Dump One Trillion In U.s. Reserves!!!!

Discussion in 'World Events' started by Ghost_007, Dec 17, 2006.

  1. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Thanks for remembering but not quite accurately - I said more than a year ago the current leadership of Chine is quite concerned with the re-integration of Taiwan - it is a question of "saving face" as much as anything. they are doing a very good job of achieving this peacefully. For example, all of the many computer makers that were operating in Taiwan no longer do - all have moved to the mainland, where the market is bigger, no import duties, etc. Direct air-flights now exist, most of the business community of Taiwan wants to and is developing more commercial ties with the main land and many support some form of rejoining, perhaps on the Hong Kong model (One nation - two systems)

    However. for insurance and extra persuasion, China has recently greatly increased the purchase of the military equipment it would need to achieve re-union by force. The US has given its promise that US will not let that happen, so what I said was:

    China wanted to get into a position that they could destroy the US economical (they know they can not resist the US in a military contest if the US were to block the forceful re-union of Taiwan) and use the THREAT to do so as a deterrent to keep the US from preventing the forceful re-union, if it should ever come to that, which is extremely unlikely considering how well the peaceful re-union approach is working.

    China will not soon dump it trillion dollars, only not hold some, which it replaces with Euros. It still need the US to buy on credit (deficit spend) the major share of its production. It domestic economy is not yet rich enough to buy most of it productive capacity. Traditionally the Chinese do not use credit. This is why China is opening it banking system to western bankers/ investors. (World's largest IPO was a month or two ago with China Industrial Commercial Bank. The Chinese communist did not do this because they love western bankers! -They need to quickly develop an economy that use credit to expand the domestic buying. - They, like me, can see the collapse of the US coming.)

    Only about 3% of Chinese even know what a charge card is. - In a few years the wealther ones (twice the US population) will be getting credit cards in the mail! Then, China will sell most of what it produces domestically to the rapidly growing middle class. - Already the rich are buying more million DOLLAR and up homes each year than Americans are. Then look out. China will not need the US to buy its goods, which is fortunate for China as then the US dollar will have collapsed and US will not be able to buy even the oil it needs to run the 1950s US economy. Not to mention the problems of too few jobs and workers to support the Social Security demands of us "old timers" will make -we still vote etc. - no escape there by reducing the SS payout already promised.

    Yes I have and do predict the US dollar will collapse, that the US will rapidly pass China economically (US going downward as china continues upward by at least 5% /year) as US economy falls into deep depression (of economic activity as no one can buy much with the weak dollars) while the Treasury’s printing press run 24/7 to printing paper to pay off all the maturing bonds that no one wants to "roll" anymore. - I.e. runaway inflations with economic activity depression! - not a pretty picture, for US and most of the world, but china will be hurt much less than most countries as it has 50+ years of experience in running a "closed economy."

    I am too old too be learning Chinese and have most assets protected against this future so I can take car of my children & grandchildren, but if I were younger: - I would be learning Chinese. I should live long enough to see China rule the world as the US once did. US has great agricultural potential. - It will survive as an economic colony of China - a supplier of food stuffs to China, but that is about it.
     
    Last edited by a moderator: Dec 17, 2006
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  3. s0meguy Worship me or suffer eternally Valued Senior Member

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    Billy t, I enjoy reading your informative analyses. Being a European myself, what do you think the role of Europe will be? What will our relations be with future China?

    And what about other nations with rapidly growing economies, such as India?
     
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  5. TimeTraveler Immortalist Registered Senior Member

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    Yeah, thats because the US economy is about collapse into a depression. Are you prepared?

    Buy gold NOW. Get your money out of the dollor NOW. China is basically telling you what to do, just do what they are doing, in fact, the moment they do it should be a signal because thats when the rest of the market will start doing it.

     
    Last edited: Dec 17, 2006
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  7. Syzygys As a mother, I am telling you Valued Senior Member

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    First, I don't think this news is real. The Chinese probably are planning on diversification, but it is not like dumping all at once.

    Second, they could also spend their huge dollar reserves on US properties. just like the Japanese bought up part of America, China could do so.

    Third, I disagree with Bill, China NEEDS the US to buy their cheap products.
    It could be a strategic move on their behalf, but they are also vulnerable to big movements in the dollar's strength...
     
  8. TimeTraveler Immortalist Registered Senior Member

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    It's too bad you don't think it's real. I know it's real. I know it's real because everyone who is rich already knows the dollar is going to fall. Bill Gates said it, and he's the richest man in the world. Not only Bill Gates but just about every rich person or person with money that I know is taking their money out of the dollar or already has it in foreign currencies. It's kinda crazy to keep all your money in one currency.

    See for yourself
    http://forum.tradesports.com/eve/forums/a/tpc/f/287103657/m/376108948

    I wish I could say it's not true. You think people want the dollar to collapse when they only have dollars? Hell no. But it's happening because, well your guess is good as mine, but it's happening, thats all I know for sure. This economy has been fragile all along, the Opec annoucement recently, when the oil companies made their decisions and started to move off of the dollar, that alone was enough to know the dollars days were numbered, if China does this the dollar is gone, we are fucked economically if that happens because China holds all of our worth. We don't have worth because we are already bankrupt and in debt, this is what happens when you over spend, this is why so many people are fiscally conservative, myself included, it's because if you over spend then there are hidden prices.
     
  9. Syzygys As a mother, I am telling you Valued Senior Member

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    I didn't say the Chinese plan to diversify was not real. But I don't think it is going to happen all at once and that day will be next Monday...

    Let's say you have a bunch of stocks. Would you announce ahead of action that you are planning to get ride of them or just start to sell slowly??

    P.S.: Buffett went short the dollar too early and lost a shitload of money in the action. In business timing is everything...
     
  10. krakatoa scared! me? hummm? No,hihi. Registered Senior Member

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    I tend to think the same as syzygys, i would be very surprised, if it happened at ounce, but then again???? Something important we have to follow. Krakatoa.
     
  11. TimeTraveler Immortalist Registered Senior Member

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    Actually yes. Monday is the first day of the stock re-opening, by giving people a few days warning, a weekend warning, it allows all the investors to prepare for it, only increasing the impact of the event.

    If China is betting on Gold, by giving people notice, it can increase the value of Gold because people now can all plan to buy Gold on monday.

    It all depends on why it's being done, if China really lost faith in the US economy, then why not pull out all at once, what difference would it make?
     
  12. valich Registered Senior Member

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    This certainly would be a catastrophy, but I see no reason to panic. Let's wait and see what really does happen in the next week or so rather than posting blind speculations.
     
  13. Brian Foley REFUSE - RESIST Valued Senior Member

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    1) The Federal Reserve Bank ceased publishing "M3" data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.

    2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.

    3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.
     
  14. Charles_Wong Registered Senior Member

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    So the only reference of Hal Turner is his own reporters and secret sources? Though I won't assume that just because he is not part of the mainstream media he must be wrong, I would still like to find some background on the professionality of his newsmedia company just to see if I should place much trust in his own research team.
     
  15. Michael 歌舞伎 Valued Senior Member

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    1)What do you mean "dump" - in theory China could TRY and SELL their USD but "dump"? Where? The ocean?

    2) A main problem for China is they can not spend their USD. They've maxed their internal infrastructure projects and many countries are leery of Chinese buying their corporations and/or land. So really I think this is a problem - for China. Their kind of stuck with their USD. But they can begin to buy gold, silver or Euros – so long as it is profitable to do so – however the prices will rise on those as soon as China starts to buy them. So again, they are stuck.

    3) Things will hit the fan as China slows down it's buying of USD - then the "correction" will occur and US consumers will pay more for their cheap crap and US exports will finally have it their way.

    For every winner there is a loser and loser a winner. Right now the loser is the US exporters and the winner is the US consumer – at some point that will switch.


    I wouldn’t cry "the sky is falling" just yet,

    MII
     
  16. TimeTraveler Immortalist Registered Senior Member

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    By dump, it means they could put it into gold, or into another currency.
     
  17. Michael 歌舞伎 Valued Senior Member

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    Well you have to have someone willing to sell you their gold (or currency) for your USD - which they will, so long as it is profitable to them.

    It was suggested that USD will not be worth crap as soon as China “dumps” them. So why do you expect someone to sell you their gold for USD? And regardless, SOMEONE will own USD, someone who thinks they are worth something.

    No one is going to say, hey hey hey, you have a wad of USD which isn't worth the paper its printed on so why don't I hand over my gold real quickly and you can be on your way ....

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    I mean come on.. people don't sell something for nothing.

    Well, OK the USA does, but China bought USD and now China will probably be stuck with their USD. That is unless they want to get so ripped off it isn’t funny. So really, they are stuck.

    I expect that China will try to slow down their purchases of USD and try and diversify, but over all they are stuck with USD. As they slow down their purchases USD will decrease in value and then the Chinese Yuan will go up relatively (if it is not pegged) and they will still lose out.


    As they say, buyer beware!

    Michael
     
  18. Michael 歌舞伎 Valued Senior Member

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    China is stuck
     
  19. Bowser Namaste Valued Senior Member

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    The only way to unass their (our) paper and realize some form of value in return, they might soon find themselves buying OUR crap.
     
  20. Charles_Wong Registered Senior Member

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  21. Neildo Gone Registered Senior Member

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    Heh, all you gotta do is go to the main page of his website and you'll know all you need to know.

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    However, his website does link to a few other similar articles, mainly from the Washington Post. They're either on the page linked in the opening post, or on the main one, I forget, so he's not the only one talking about the subject.

    - N
     
  22. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    What will happen in both EU & India are much harder to call than the coming collapse of the US.

    On EU:
    As I have little detailed knowledge of EU, and it is still a strange mix of economies (Germany not the same as Portugal or Italy etc) I do not know what to say. How is EU carrying its debt load? Is it, like US, borrowing more every year to cover the interest on the old debt? - If so, EU will follow the US down an accelerating path into collapse and chaos. Perhaps EU an Euro will break up. Germany will not want to see inflation caused by inability of the Mediterranean countries* to manage their economies destroy Germany. I.e. I would not be surprised to see a new Detuches Mark a decade from now. The world's only magnetically levitated train in routine commercial service is in China, but it was "German made." I can see a future with Germany and China working together, but there is too much uncertain and too many things I am too ignorant of to have much confidence in my views on the EU. One important problem for the EU is the low birth rates, especially for France where the labor unions are strong (less than 40hour week, students beat down very modest and necessary reforms this summer etc.) Another important problem for EU is energy from Russia. Will it be there? or go the China, via pipelines already being constructed? China will get the energy it needs, but form where is unknown. Many long term deals made recently in Africa (where without any concern about "human rights" dictatorial governments etc, China can "do business" well) for energy and raw materials. China very likely has more oil in the western provinces (near Iran and the xxxistans) than all of the Middle East and is rapidly exploring, suppressing the natives, etc. The new high altitude rail to Tibet is for the very rich minerals that are there. China operates with at least a 50-year time horizon and is doing what it needs to rule the world, and will, but India will be strong too:

    On India:
    Perhaps most important thing is Indians are young, significantly lower average age than the Chinese, and can think independently. - Not like the Mainland Chinese who generally think "correct thoughts." China is well ordered and India is "functioning chaos" burdened by many beliefs that do not fit well into a modern economy (monkey and cows wander the streets, must be feed, not eaten, etc.) India does not have the "one child policy" and now women pregnant with girls have much more trouble knowing the sex of their unborn baby (telling is illegal) - I expect that one of China's import expenses will be "fertile females" soon, if it is not already, and India will not have much of this expense. I have quite a few Indian ADRs, think the rupee will do well against the dollar, at least for a decade, but India needs to find energy as China is doing and get more of the rural population educated. I think there is a danger India will become a very "Brazilian society" - a fraction of the population very rich and a majority very poor. Perhaps their somewhat fatalistic religious beliefs will help keep this stable as Catholism has in Brazil. India is fascinating and impossible for me to even guess what will happen.
    -------------------------------
    *Count Portugal as one. - It is such a "basket case" that 1/3 of the population wants to terminate the existance of the country and be come part of Spain! (Which is deffinitely not the strongest part of EU) I spent a few hours last week with professor from Portugual and asked her about this, and other things (the fires; Did the Taga, which she lives near, flood etc). She said: "It will never happen. - Spain would not be that foolish. (to accept us)"
     
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  23. Syzygys As a mother, I am telling you Valued Senior Member

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    The Forex (that is currency for you) market is 24/7....
     

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