China Set To Reduce Exposure To Dollar

[Twist_U_Up]

Time to buy some gold,get ready for a depression :wow:


"SHANGHAI, Jan. 9 -- China has resolved to shift some of its foreign exchange reserves -- now in excess of $800 billion -- away from the U.S. dollar and into other world currencies in a move likely to push down the value of the greenback, a high-level state economist who advises the nation's economic policymakers said in an interview Monday.

As China's manufacturing industries flood the world with cheap goods, the Chinese central bank has invested roughly three-fourths of its growing foreign currency reserves in U.S. Treasury bills and other dollar-denominated assets. The new policy reflects China's fears that too much of its savings is tied up in the dollar, a currency widely expected to drop in value as the U.S. trade and fiscal deficits climb.

China now boasts the world's second-largest cache of foreign exchange -- behind only Japan -- and is on pace to see its reserves climb past $1 trillion later this year. Even a slight diminishing of the dollar as a percentage of those holdings could exert significant pressure on the U.S. currency, many economists assert." <more>

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/09/AR2006010901042_pf.html

[sasha031]

1. this si very scary

considering our government is run on a Chinese credit card....

[Surya Gayatri]

2. China knows it has too much

tied up in US debt and is far too exposed. They have put their finger into the prevailing financial wind and realize that the economic future of their biggest trading partner is blowing much less favorably than BushCO would have us believe. SG