China threatens 'nuclear option' of dollar sales

[Maximilian]

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml


The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Read the rest at the link...

[ddg1263]

Well it would be really bad for us if they dumped their holdings. And I am not talking about just a small recession, but something similar to the 30's bad. However, their own country will suffer too. On the brighter side, we can all be happy we got a 10 to 15% savings from walmart. :gaah

[robinhoooood]

Either way the dollar is headed for record lows. When the Fed finally does act and lowers the interest rate... that will be enough to send the dollar below 80 on the index... coupled with even a modest selling by China and the Dollar is toast. And let's not forget China could easily make up our consumption numbers with their own population if their currency became worth more and their citizens became as wealthy as our middle class... then they would make everything and buy everything... and we would be out in the cold.

[Biblenuggetlady]

:scratch I have seen this said once a year for 3 years now.

[Rondaben]

yep, i've said it too.

This wouldn't be just a depression, this would be a monetary collapse. If China dumped, you can be assured that Japan won't hold on to them either. No one wants to be the last one standing holding worthless paper....

This is the way the depression started...a war over tariffs.

[Just A Clay Pot]

Worst thing is, this could have just as bad of an effect on the country as any WMD. Plus, it can be recalled after it gets the point across to us.

Consider this: China dumps a large chunk of debt into the world market. Dollar devalues. Things get nasty for a few days. Then, China buys back a hefty amount of that same debt, for a lower cost. Sorta works like a national shock collar on the US.

This situation gets my attention more than any terrorist cell that might be in the country.

Just my opinion.

[tom_roberts]

Well

you know if they do that we could always use the real nuke option on them

weird

M.A.D. is now a viable option in economic ware fare

[drmaul]

Could this be why the North American Union is coming?

[tom_roberts]

the NWO perhaps?

I just do not understand why we do not print our own money like we used to

quit paying the fed:idunno

and back it with Gold and silver

economics is not a strong point for me but surly that would be better

than watching our dollar and its current performance:idunno

[Rondaben]

I just do not understand why we do not print our own money like we used to

quit paying the fed

and back it with Gold and silver

economics is not a strong point for me but surly that would be better

than watching our dollar and its current performance

That won't happen for several reasons. First, if the dollar is pegged to gold/silver then you cannot tax the citizens through inflation. That is all that inflation is--the government prints more money for thier pet projects/wars, devaluing the worth of every other dollar by a fraction....That fraction comes out of your purchasing power, but the politicians can just blame it on "economic forces" instead of thier greed and corruption.

The next reason is the fixed amount of gold and silver in the world and the expansive cost of our already outstanding debt. If the gold standard was established the rate would be well over $100,000/ounce. Guess who holds the largest reserves of Gold now? Yep, China. They have been buying it up at the rate of 500-2500 tons per year.

The whole purpose of China holding these funds is so they can gain supremacy again in the East. They WILL make a move on Tiawan--and we will do absolutely nothing about it. We won't risk war nor will we want China to destroy our economy in retaliation. We are on our knees.

And make no bones about it--China and Iran are in Union as well. China must have Middle East oil to support its booming economy. China will protect Iran (we have already seen some of this) in the hopes that Iran can secure oil fields in Iraq and other ME areas, thereby providing cheap oil for thier country. It all makes sense prophetically if you think about it as well. Why do you think the kings of the east come to the middle east in the last days? It is for the oil and spoils, amongst other things.

you know if they do that we could always use the real nuke option on them

We don't have the political will for this, nor would we accept the counterstrike that would surely come. China can sacrifice 400 million people in a nuclear exchange. that would improve their position, actually, to not have so many people to feed and look after. We, on the other hand, can't keep focus enough to fight a war when we lose 3000 people on 9-11. America is asleep.

Could this be why the North American Union is coming?

Yes. this is precisely why the NAU is coming. The dollar is a dead currency. The collapse will either occcur from China (and or Japan) killing it or we will continue to accrue national debts at the rate of 4 trillion/year until we kill it ourself. The dollar represents a debt that will NEVER be repaid and when the world realizes it, the dance is over.

The only way to do get beyond our debts and retain some semblance of power is to begin a new currency and walk away from our debts. The Amero is the likely solution--fixing our current financial problems while also advancing the globalist agendas of our politicos.

But that's just me...i'm only safe because I wear a tin foil hat....