Will China be the sole superpower as they dump our money?

[Jokinomx]

It looks as though our team of top money managers failed to convince the Chinese not to dump our money. This means that as soon as Monday they could dump the TRILLION American dollars they hold.... other countries most likely will follow.

>snip<

China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.

According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:

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 up wards 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.

For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; "we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts."

>snip<

I think we are in for a bumpy ride.... economically and militarily... and the Chinese see this as the time to make their move to be the only superpower and supereconomy....Read the entire article it is quite sobering.....

http://www.halturnershow.com/ChinaToDumpUSDollars.html

[Junkdrawer]

1. "Why China Is Rising And The U.S. Is Declining"...

...

National policy failures such as not adequately supporting the use of renewable energy technologies have contributed to the growing U.S. trade deficit. For example, the United States should be a leading manufacturer and exporter of solar cells and wind turbines, but it has fallen behind both Europe and Japan. The solar cell, invented at Bell Labs in 1954, is an American technology. But the U.S. effort to develop solar energy was so weak and sporadic that both Germany and Japan forged ahead and developed robust solar cell manufacturing and export industries.

The situation is similar with wind. Although the modern wind industry was born in California at the beginning of the 1980s, the U.S. failure to sustain support for wind resource development allowed European countries to largely take over this industry.

Even though rising oil imports are widening our trade deficit, we consume oil with abandon, weakening the economy and undermining our political independence.

We have lost influence in world financial markets simply because of our mounting debt, much of it held by other countries. If China’s leaders ever become convinced that the dollar is headed continuously downward and they decide to dump their dollar holdings, the dollar could collapse.

Beholden to other countries for oil and to finance our debt, the United States is fast losing its leadership role in the world. The question we are facing is not simply whether our Christmas is made in China, but more fundamentally whether we can restore the discipline and values that made us a great nation—a nation the world admired, respected, and emulated. This is not something that Santa Claus can deliver, not even a Chinese Santa Claus. This is something only we can do.


http://www.newwest.net/index.php/city/article/why_china_is_rising_and_the_us_is_declining/C396/L396/

[Jokinomx]

18. I agree...

Here in Michigan... the founder of Solar Avonics in Auburn Hills stated that raygun cut funding for his research in the 1980s and this set his research back two decades.... now finally his company is building six manufacturing plants outside of Greenville Michigan to produce Solar Shingles that will produce power for homes throughout the world.

You are so right about the U.S. not taking the lead with technologies they created....it is so sad that our politians put the interests of the Oil Lobbiests ahead of what was in the best interests of the U.S. and the world.

:toast:

[Junkdrawer]

2. "China sounds alarm on falling greenback"...

China's central bank issued a warning Thursday about the risks of dollar weakness, piling fresh pressure on the US currency after a steep drop over the past few weeks.
The warning was contained in the full version of the central bank's 2006 financial stability report, which it posted on its Web site.

"If external capital stops flowing into the United States, a significant drop in the US dollar may occur with consumption and investment shrinking, interest rates rising and financial markets experiencing turbulence - endangering global financial and economic stability," the report said.

The central bank, holder of the world's largest foreign currency reserves, said more capital will flow into China as the US dollar weakens and fund managers dump dollar-denominated assets.

...

http://www.thestandard.com.hk/news_detail.asp?pp_cat=22&art_id=33646&sid=11244948&con_type=1

[twilight_sailing]

3. I've got $20 in real money that says it doesn't happen

"This means that as soon as Monday they could dump the TRILLION American dollars they hold.... other countries most likely will follow."

"Could" "as soon as Monday" etc. What does that mean?

Let's narrow it down to next week. Wanna bet?

[originalpckelly]

11. What's funny is that this racist piece of shit whom wrote the article...

doesn't even know that 1/3 of China's dollar reserves are made of the US Debt they hold.

[twilight_sailing]

15. They never want to bet,

which means, I suppose, they know how much what they have to say is worth.

[necso]

4. Depends on their timing.

And their ability to perceive (and choose) the appropriate timing will be affected by the clarity of their perception (taken broadly).

[Junkdrawer]

5. OK. looks to me like this is real, BUT I would expect a "Pump and Dump"...

Temporary rises followed by partial dumps. It's the traditional way big holders dump their holdings of anything.

China wouldn't want to see an instant collapse. They hold too many dollars.

[Junkdrawer]

7. Remember how Kenny Lay sold his Enron stock?

"Enron is great!" (sell, sell, sell)

"The future of Enron is so bright, I need shades!" (sell, sell, sell)

"Man, I know I'm going to buy more Enron with my bonus money!" (sell, sell, sell)


THAT'S what China will do....

[NMDemDist2]

6. this should be on the Greatest n/t

[Jokinomx]

12. Thank You... I agree....

Why is the media ignoring this issue...? Most likely because if the American people realize what is actually at stake... it will put investors in a panic..to sell their stocks while our dollar has some value..

The consequences are staggering....

Thanks for the vote... this is huge...

:toast:

[teryang]

8. Not likely

IMO. I agree with the macro trends pointed out and the ultimate outcome will be unfavorable over the long run for American currency and economy.

The reasons I'm not looking for a cataclysm of the dollar next week or very soon because:

Undermining the dollar abruptly will affect China's preparations for the 2008 Olympics and their internal political agenda. The most risk for Chinas rulers or those of any nation politically is during times of rising expectations. Crushing the dollar suddenly before the Olympics will hurt their expansion efforts in terms of importing foreign capital, which in consumer terms is principally American.

The only way to get out in front of the collapse of the dollar is to make it gradual and as unnoticed as possible. Why would the Chinese be in hurry to collapse their own FOREX reserves?

The Paulson/Bernanke pilgrimage is more in the nature of a private profit making overture by American banks than an effort on behalf of the American dollar or economy. The thrust of these financial elites is to advance their own profits by exporting American capital for financial opportunities in the Chinese banking, resource, retail and construction sectors. A very smooth decline of the dollar facilitates the interests of both sides.

I'm not ruling out the possibility of some sort of US financial meltdown precipitating a sudden drop in value of the dollar below its downside resistance. I don't think its going to happen next week but if it did, I would make money from it. I'm borrowing from Ken Fisher's notion of what it is I'm not perceiving or what others are not perceiving when I invest against the dollar.

[Jokinomx]

13. You make valid points...

I hope your correct in your analysis...

Thanks for sharing your opinions...

:toast:

[madrchsod]

9. no

the oil guys in the middle east hold more of our money than china. maybe in 15-20 years china could challenge the usa but china and india will be the hot spot in the coming years

[Jokinomx]

14. I agree the Opec does have power...

That is why the U.S. has been trying to get them to pressure China from dumping the dollar...

If I remmeber right... Hussien was about to switch to the Euro before we took him down... and now Iran is about to do the same.

I am concerned that China will see this as an opportuntiy to become the sole super economy in the world... and put the U.S. in a position that of little or at least lessened influence in the world.

We certainly have shown the world that we can't handle a small country like Iraq...let alone a true military power such as China... if they can take hold of the economic strings of the U.S. we truly dependant on them for our economic well being..

Thanks for sharing your opinions.

:toast:

[Mojorabbit]

19. Well there is this

http://www.gulf-daily-news.com/Story.asp?Article=164543&Sn=BUSI&IssueID=29270
15 December 2006

Iran dollar reserves 'trimmed'

TEHRAN: Iran, facing political pressure from Washington, has been shifting its reserves out of dollars since at least 2003 and now holds 70 per cent in other currencies or gold, a former senior state banker was quoted as saying.

Ahmad Hatami-Yazd, the former managing director of Iran's state-owned Bank Saderat, said Iran had been moving away from dollars since the period when the central bank governor was Mohsen Nourbakhsh, the daily Poul reported.

Nourbakhsh died in 2003 and Ebrahim Sheibani now heads the central bank.

"Considering the American threats, Iran's central bank, since Nourbaksh was the governor, decided to change its currency reserve from dollars to other currencies and up to 70pc of these currency reserves has been changed to non-dollar currencies and gold bullion," Khatami-Yazd said.

Central bank officials could not immediately be reached for comment.

[Mojorabbit]

20. and this

http://www.ft.com/cms/s/277471c2-8889-11db-b485-0000779e2340.html
Oil producers shun dollar

By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London

Published: December 10 2006 20:11 | Last updated: December 10 2006 20:11

Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.
snip
Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second.

Meanwhile, they increased their holdings of euros from 20 to 22 per cent, the BIS said. The speed of the shift may help to explain the weakness of the dollar, which recently fell to a 20-month low against the euro and a 14-year low against sterling.

The BIS, the central bank for the developed world’s central banks, is customarily cautious in its language. However, it noted: “While the data are not comprehensive, they do appear to indicate a modest shift over the quarter in the US dollar share of reporting banks’ liabilities to oil exporting countries.”

The review shows that Qatar and Iran, whose foreign exchange policy has sparked widespread market speculation, cut their dollar holdings by $2.4bn and $4bn respectively.

snip
Currency switches are likely to be progressive, subtle and discreet, as untoward attention could hit the dollar, lowering the value of depositors’ remaining dollar-denominated assets.

[originalpckelly]

10. Hal Turner is a more racist version of Sean and Rush...

http://en.wikipedia.org/wiki/Hal_Turner

He's a white nationalist, he's probably doing this to make people afraid of Asians.

China would never do this because it would kill the market they sell goods into. The amount of money they lost on the dollars they have in their reserves, is only 1/4 of what they make off the USA's massive trade deficit with China.

1/3 of China's dollar reserves are in US Treasuries (i.e. America's national debt), they cannot convert those to Euros. Secondly, if they were to convert the other solid currency reserves to Euros, they would devaluate the debt they hold. Creditors, the owners of debt, always loose when the value of a currency goes down, because the value of the debt goes down as well.

For those reasons, this story is BS.

*On a side note, this is an interconnection which makes the US and China close. We rely on each other, each country has the other by the balls.

[Jokinomx]

17. I hope your right....

If your not... we will be in deep shit...

I for one have had a food and water storage for natural distasters...it is a logical thing to do... but it could also help if there is an economic collapse like the 1929 one.

The Mormans learned from the depression that you can't rely on our government and started encouraging all their members to have a years supply of food and water... I think that this advice would be wise to follow...

good luck... and thanks for sharing your opinions...

:toast:

[NMDemDist2]

16. we need one more vote here folks n/t

[RestoreGore]

21. And our trade deficit is now 225.6 Billion

http://news.yahoo.com/s/ap/20061218/ap_on_bi_go_ec_fi/economy

So much for being the richest country in the world. And I agree with you, China will most definitely use this to their advantage, but they too are being squeezed ecomonically because of their environmental problems which are costing them (pollution and drought the two main problems) which they also blame us for by claiming that if they didn't produce so much for us they wouldn't have the amount of pollution they do. This is not a good economic scenario for us, but I have to be honest and state that if for once I could pick something up in this country and not have it read "Made in China" I would happy. We did put ourselves in one heck of a bind.

[Jokinomx]

22. You are correct RestorGore.....

Thanks for posting your thoughts.... China is in a position to put our country in a tailspin without firing a shot. We have put our "National Security" at risk by allowing them to control so much of our money. Since the Federal Reserve is not a government agency, they do not have to follow ANY direction from our elected officials. The Fed is a private corporation that prints money at will at the cost of printing paper.... and then loan that paper out to banks.

The Chinese should be concerned since they don't know how much actual money is being printed anymore since they quit publishing the M3 report earlier this year.

I think Greenspan must have seen the writing on the wall and retired before the fall....

Good Luck in your neck of the woods...

:toast: