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

Then it is really stupid to tell in advance that they are planning to buy HUGE quantities... Use common sense....

 

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Actually, those links don't support his website. They talk about the US bankers visiting China, but nothing about the imminent Chinese US dollar dumping.

So in short: His website has no inside info and actually it mentions the word: SATIRE on its homepage...

 

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1.7% of their GDP is from US purchases. ( 0.21*762/8883 = 0.017, from cia world factbook)

That's a significant amount.

 

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who cares.....

let the fucking dollar fall and fall hard.....

let the USA loose all its buying potential abroad... and let alot of buisnesses fall apart... who cares.


a lower dollar is the only thing that can save the crumbling manufacturing base of the usa....

with a low dollar... everything we produce becomes more exportable.

its a problem... IF YOUR AN IMPORTER.

but if your an american auto worker, or work in manufacturing or production, and have all your wealth here in the usa... then it wont matter.

this will simply raise the price of all foriegn goods.


i.e.... no more buying books in india for 10 cents a copy..

oh, to bad.. you may have to pay as much as it costs to pay a local producer...

in theory... possibly, in some circumstances, this will benefit all local producers and be a net loss for all producers world wide, who used to sell to the usa.

-MT

 

No we don't, atleast not the Netherlands. Didn't the US see this coming for a while and have some sort of plan/ideas on what to do next?

Isn't China creating a huge work force of highly educated people, why would they need countries such as Germany?

Whatabout new forms of energy? Or nuclear energy?

Suppose China will rule the world once, what will they do, what are their goals? If not the welbeing of their citizens? Will they ever become a democracy?

Will countries around the world 'Chinaize' and become dictatorial, like what happened when the US became a world power?

What will Japans role be in all this?

 

This does scare me a bit, but as MT points out, it would have some benefits, as well. I seriously doubt China would make any move to throw the currency market into chaos as it would fuck themselves too. We will probably see a gradual move towards other currencies.

Remember the eighties, everyone thought Japan was going to rule the world. In "Back to the Future", the future version of MJF worked for a Japanese company. Then Japan's economy fell into a funk.

Don't count the US out yet.

 

I BELIEVE the fall of the dollar is intentional....

it benefits american buisenesses.

america is all about buisness.

-MT

 

the power of the usa.... is its united states...

each state is as large a a normal country.

51 states.... makes for alot of potential.

-MT

 

50 states not 51 , China is gonna deal us a blow but we get Iraq if they get Taiwan

 

I think the economy of California alone is larger than Germany's (3rd largest in the World). America is a beast.

 

i guess if robert zemeckis said it, i will believe it.

 

So it's not happening ... yet?

 

Actually if China sells the dollar in exchange for Gold China will cash out right while the dollar is in a downward spiral anyway. I think thats why people fear it may happen, because all the signs are there.

The Euro, and the Chinese currency will go way up if the dollar goes down, China is going to win either way, because they have relationships with everyone, from Europe, to America, to Russia, they even have relationships with Africa to get stuff like gold.

As far as I know, buying Gold will be profitable if it's bought in Euro or in Yuan, but not in the Dollar if China cashes out. In this way China would STOP losing money because they already lose money when we do this deficit spending, they are losing billions as it is.

If China crashes the dollar we are fucked, fucked more than we have ever been since the great depression.

 

Nothing is wrong with the USA, as a concept. The federal government however is bankrupt, and China knows it. I mean where the hell do we get our money from anyway? We spend what seems like unlimited amounts of money on the Iraq war and other wars, and our dollar is going down in the process. At the same time we are cutting taxes lower and lower, so how exactly are we funding the war? We are borrowing money from China, thats how.

Basically China owns our economy because they lend us money, we are in such debt, that if China were to pull out now and collect their money, China would suddenly be rich as all hell because theres trillions of dollars we are talking about here.

If they put that into the Euro, it could literally bankrupt the federal government, and our economy with it. Do you remember what happened during the great depression? Do you remember what happened in Germany? It's going to be RIDICULOUS.

Yes the USA is big, but we are not efficient, and if our federal government goes bankrupt it's going to take complete reconstruction effort and decades to fix and it still might not ever go back to being the top economy in the world.

Let's hope it does not go bankrupt but knowing how the global community feels about America right now, it's very possible that this could become a trend and if that happens we will go bankrupt because there is no way we can pay for this.

The fall of the dollar, does not benefit most American businesses, not small businesses anyway.
However if you have a lot of money, you'll likely have your money in a swiss bank, or in foreign currency, or in gold, but it's not going to be in the dollar, so yes it does benefit people who have plenty of money. People who have plenty of money knew this was coming for a long time and already diversified out. If you diversified out of the dollar, you'll actually profit big time when the dollar crashes because the Euro will skyrocket.

And it gets worse. Iran is going with the Euro also!

http://english.aljazeera.net/NR/exeres/57E17F90-F717-45AF-B56E-87235A4BD8B6.htm

Remember, our entire economy is based on the petro dollar, the real scare is the fact that we are seeing the oil companies switch from dollar to euro, thats the scariest economic news.

AND it's even worse than that,

Bloomberg is discussing it now, so you know something is really happening.

http://www.bloomberg.com/apps/news?pid=20601101&sid=aoiTx4zeQfMg&refer=japan
http://www.bloomberg.com/apps/news?pid=20601103&sid=aInMcl.NkY54&refer=us

http://www.moneyweek.com/file/23192/why-its-now-illegal-to-melt-down-us-coins.html

 

GSP of California is $1.62 trillion (13% of the entire USA).

GDP of Germany is $2.522 trillion (5th in the world).

However, germany is an export beast. It currently has the largest trade surplus in the world.

Germany export totals a value of $1.016 trillion f.o.b. (2005 est.)

The export of the USA in comparison merely values $927.5 billion f.o.b. (2005 est.)

In fact Germany exports more than the USA.

While Germany only imports $801 billion f.o.b. (2005 est.)

The USA imports $1.727 trillion f.o.b. (2005 est.).

The US has a clear trade deficit.

I'm not an economist, but I wonder if the US economy could be build on air?

 

fiat money allows it.

 

Fuck manufacturing jobs.

I'll be damned if I have to work blue collar for the rest of my life.

 

Careful: you're mixing PPP-adjusted GDP and ER GDP.

In PPP, China's GDP is the $8.883 Trillion you used (this is the amount of Chinese goods that China's GDP can purchase per year).

In ER, China's GDP is only $2.225 Trillion (this is the amount of American goods that China's GDP can purchase per year).

When considering the portion of GDP coming from trade, it's better to use Exchange Rate figures (international trade is the whole point for exchange rates in the first place, right?). In particular, the $762 Billion figure you cited for Chinese exports is given in ER, not PPP. So, the correct calculation is:

0.21*762/2225 = 0.0719. Which is to say that 7.19% of China's GDP consists of exports to America.

 

Correct. The website's news was innuendo, rumour...

 

The truth of the matter is that China (and many other players) IS planning to diversify its foreign currency holdings, and everyone knows this. This is not the same as "dumping one trillion dollars," but more like "no longer adding to the trillion-dollar pile at such a fast pace." Also, they're looking to move some of those dollar holdings from US government bonds into actual assets (US companies, land, etc.), which give higher returns than bonds. This is exactly what every other country in history that has acquired lots of dollars has done (Japan, Europe, Persian Gulf states, etc.), and it has yet to destroy the dollar or the world economy. To add some perspective, Japan also has about $1 Trillion in dollar reserves (China only surpassed them in the last year or so), so it's not as though China is the only player in the market for dollars.

If China were to try to dump its dollar holdings, a number of things would occur, none of them beneficial to China. First, the value of said holdings would plummet, leaving them with a big pot of nothing in exchange for all those goods they exported to America over the past decades. Second, the exchange rate of the Chinese currency would shoot up (the entire reason they accumulated all the dollars in the first place was to hold it down), decimating China's export position and, thus, entire economy. Even if the Yuan's exchange rate with the Euro remained favorable, the EU (and everyone else) would surely not want to trade with a country that had just attempted to destroy the economy of their largest trading partner. Finally, even if China DID want to shoot itself in the foot in order to attack the value of the dollar (which they obviously do not), America would retaliate, first through the WTO and, should that fail, through direct sanctions and military action. We would expect most countries to side against China in such a scenario, since they would have isolated themselves by pursuing such a blatantly hostile, in-bad-faith trade/monetary policy. International trade is not a suicide pact.