China:- DUMP the $ (This is it!)

[Mega]

http://www.ft.com/cms/s/0/7851925a-1...0779fd2ac.html

A year ago it would have been a Joke to say this.
Mike

[charliebrown]

Re: China:- DUMP the $ (This is it!)

ok, im buying more gold today with my $USD.
the interesting thing is that all the currencies in the SDR suck.
everyone of them is running a keysian money printing scheme.
Is this just an interim solution for them?

[charliebrown]

Re: China:- DUMP the $ (This is it!)

P.S. waiting to by gold here, i'm waiting to see if the sheeple are going to sell gold to buy stocks. so far it is not happening. hoping some more time in the plus column will cause the sheeple to sell gold.

[photoncounter]

Re: China:- DUMP the $ (This is it!)

Isn't this conflicting !

Official says China to continue buying US debt
Monday March 23, 6:43 am ET
By Christopher Bodeen, Associated Press Writer Chinese central bank official says country to continue buying US government debt BEIJING (AP) -- China will continue buying U.S. government debt while paying close attention to possible fluctuations in the value of those assets, a vice governor of Beijing's central bank said Monday.

Investing in U.S. Treasury bills is "an important component part of China's foreign currency reserve investments," People's Bank of China Vice Governor Hu Xiaolian said at a news conference on Monday.

...

http://biz.yahoo.com/ap/090323/as_ch...reasuries.html

May be we can trust this

http://www.pbc.gov.cn/english/detail...ol=6500&id=168

http://www.ft.com/cms/s/0/7851925a-1...0779fd2ac.html

A year ago it would have been a Joke to say this.
Mike

[K Carlson]

Re: China:- DUMP the $ (This is it!)

http://www.ft.com/cms/s/0/7851925a-1...0779fd2ac.html

A year ago it would have been a Joke to say this.
Mike

A few, related developments....

The Chinese have planned a temporary experiment in using the yuan as the reserve currency of Asia. They also have been buying interests in gold, mining and oil. Lately, China has been selling Agencies and reducing its long-term US securities, while increasing its short-term US securities. The economists on iTulip can hopefully explain the meaning of that shift in purchases. Can it be that the Chinese are slowly moving out of the long end, but increasing their short end interests, in order to prevent a sudden collapse of the dollar?

[touchring]

Re: China:- DUMP the $ (This is it!)

A few, related developments....

The Chinese have planned a temporary experiment in using the yuan as the reserve currency of Asia. They also have been buying interests in gold, mining and oil. Lately, China has been selling Agencies and reducing its long-term US securities, while increasing its short-term US securities. The economists on iTulip can hopefully explain the meaning of that shift in purchases. Can it be that the Chinese are slowly moving out of the long end, but increasing their short end interests, in order to prevent a sudden collapse of the dollar?

they'll support the dollar for as long as needed while they buy resources for cheap.

[K Carlson]

Re: China:- DUMP the $ (This is it!)

they'll support the dollar for as long as needed while they buy resources for cheap.

Thank you Touchring.

[charliebrown]

Re: China:- DUMP the $ (This is it!)

oh yeah and they're just going to say $USD is dead were selling tomorrow.
they are trying to wiggle out of their postion, and trying to stay under the radar. I would do the same thing. in fact i have. i have change my 3yr treasury portfolio to 3month t-bils. im slowly buying gold and resources.

[ASH]

Re: China:- DUMP the $ (This is it!)

they'll support the dollar for as long as needed while they buy resources for cheap.

It's a value optimization problem, isn't it? If they stop buying dollars abruptly, or sell, then they crash the value of their existing holdings. But if they keep buying dollars and don't do anything with them, then they risk losing value through American printing. So, the trick is to find a strategy that maximizes the value of what they've got (or minimizes the losses), and I think you've hit upon what that strategy is.

[Guest]

Re: China:- DUMP the $ (This is it!)

There is also the "deer in the headlights" factor - when the pile of fiat dollars at stake assumes really gargantuan proportions, the most intelligent money manager will think long and hard before he makes any abrupt or large move at all to initiate any resolution of the issue - fully aware that any move made, sparks a chain reaction of causes and effects. The size of this pile of reserves is large enough to cause a quite long period of deliberation without evident action occurring. Here's another corrolary - suppose the USD (or Finster's FDI) is going to turn back out of this nascent downward correction and blast up to 100 on the USD index. Disregard all of the unsound fundamentals underpinning such a move - if we observe the USD do just that, this will to some small extent alleviate China's "burning need" to get the heck out of their dollar position *immediately*. The potential for unintuitive outcomes is there, and is quite treacherous to anyone punting over-confidently based upon how they imagine it will, or "must" play out.

It's a value optimization problem, isn't it? If they stop buying dollars abruptly, or sell, then they crash the value of their existing holdings. But if they keep buying dollars and don't do anything with them, then they risk losing value through American printing. So, the trick is to find a strategy that maximizes the value of what they've got (or minimizes the losses), and I think you've hit upon what that strategy is.

[Down Under]

Re: China:- DUMP the $ (This is it!)

suppose the USD (or Finster's FDI) is going to turn back out of this nascent downward correction and blast up to 100 on the USD index.

Sorry Luke. I think pigs'll fly first.

[nero3]

Re: China:- DUMP the $ (This is it!)

I think this is like around 1971, then it was France that was complaining. There is always someone that is complaining. The US will devalue their debts, and then raise interest rates, as long as the paper system works it work. Only hyperinflation will destroy the dollar as a reserve currency I think.

[c1ue]

Re: China:- DUMP the $ (This is it!)

Here's another corrolary - suppose the USD (or Finster's FDI) is going to turn back out of this nascent downward correction and blast up to 100 on the USD index. Disregard all of the unsound fundamentals underpinning such a move - if we observe the USD do just that, this will to some small extent alleviate China's "burning need" to get the heck out of their dollar position *immediately*.

Lukester,

The problem with what you're saying is that you seem to still be assuming the dollar index's behavior is independent of outside entity's actions.

Obama's administration has clearly stated that inflation is coming. Damn the torpedoes, sink the dollar.

Certainly this policy could be reversed, but it is unlikely to happen until after the negative effects of a de-facto dollar devaluation are felt.

Unless of course the real 'move' is calling China's bluff - the reflation of the bank's balance sheets and massive expansion of the government's/Fed's balance sheets is all a grand illusion.

Who's our Daddy?

[Southernguy]

Re: China:- DUMP the $ (This is it!)

Chinaīs trade surplus is sinking.
And they are moving into a big infrastructures construction project. That means buying lots of raw materials, from copper to oil.
All that means they are lowering in fact their dollar holdings, or at least not enhancing them.
I think dollar is now being hold in itīs value by dollar payment of debts. As Keen states, there is big money destruction on the way, which the FED is trying to counteract by money printing.
All Chinese reserves sum up to only one of the bailouts put in place recently. They donīt have the means, presently to be of decisive influence. Of course, they could if they suddenly sold all they dollar holdings for, for instance, gold.
They shall not do such a stupid thing. But Iīm shure theyīre reducing their exposure to US financial assets.