CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

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CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
*** BREAKING NEWS ***


Tells visiting Bush administration officials they will not sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large!!!!!!

BEIJING, CHINA -- Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China's Currency Reserves and convert those funds into Euros!

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 upwards 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."

Early this week, in an unusual move, the Bush administration sent virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Dec. 14 and 15.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.

The Bush administration wanted to get China's cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.

According to the source, Fed Chairman Bernanke left the meeting "pale and in a cold sweat" as the implications of China's decision seemed to sink in.

The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.

This would cause a worldwide sell-off of dollars, create almost immediate "hyper-inflation" in the US and also impact world markets at a level "worse than the Great Depression of 1929."

Arabs to the rescue?

In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S.!

Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they "would not be inclined to sell oil to any particular nation that intentionally caused such a collapse."

This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.

The OPEC officials even went so far as to say "Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off."

Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .

Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.

If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the jewish state to preserve itself.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

uh oh ....What % of their holdings is that?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

yikes!



:call: "Hello, Hans? Send me more 90%"

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Is the Hal turner show the source of this info?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Looks like a Hal Turner exclusive.

Why, is he unreliable?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

This seals it! The U.S. will have to invade China next week to keep them from dumping their dollars.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

How do they plan to dump them? I'm not sure I have a grip on who would buy them and in what form? Anyone know the skinny?:confused::confused::confused:

How fast can they Dump one trillion? Or does it matter once they start the process?

:confused::confused::confused:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I wouldn't trust him.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Yes, I think Hal Turner is unreliable.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Don't hold your breath waiting for this.

The Chinese still need us buying their trinkets to keep employment up and their domestic political situation stable.

When we go down the world goes down.

Wait until after the Olympic's...IMHO

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Good thing it's the weekend. I wish I had a lot of dry powder right about now. What's needed is alternative source confirmation. Scary business.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

They would never announce such a thing, you don't shock a market into a global sell off before you unload first.

They're not that stupid.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Hey, it's gotta happen sometime, right?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

From what I've read, their total holdings are 1 trillion, 700 billion of which is in USD.
So if they are going to dump 1 trillion dollars, that would be about 130% of their total dollar reserves. :wazzup_sg

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

An announcement maybe enough to throw the markets in a tizzy. A warning shot maybe...if it's true? :hmmmm:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

http://clusty.com/search?input-form=...llion+reserves

If it's true, how the heck could Hal Turner be the first to release the news? That makes no sense. He's a jerk. He's not on the cutting edge of world events.

It's possible but improbable.

http://www.dailyreckoning.co.uk/article/071120062.html

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Nobody can "dump" 1 tril. There is not enough Euros, for that. Or any other currency. And who would want that kind of US paper, made of thin air anyways?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

A quick search on google news doesn't show anything about this.

I'm going to assume this is bogus for now but I'll keep an eye out for it. If it is true.... Yikes.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Hal who?
I'm sure Ben Bernanke left the meeting and immediately telephones "Hal who?" to inform him of TEOTWAWKI.:rolleyes:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Hey, a trillion is only a thousand billion.
There are at least that many African Nations, aren't there? :banana:
OK, it's probably............ why? Why would anybody report this? :Sorry:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Hey, man! Back off!


Outspoken, opinionated and brutally blunt, Hal Turner has been called one of the Founding Fathers of the talk radio revival. Hal brings the kind of intellect, humor and a candidness to talk radio which hasn't been heard in years. His biting commentary drives Leftists nuts and makes the politically-correct crowd run for cover.


An ardent Pro-Life, conservative, Hal enjoys a rather mischievous Libertarian streak--a dichotomy that confounds some. Until October, 2006, Hal was a Registered Republican but changed his registration to "Unaffiliated" after the GOP changed from the "Grand Old Party" to "Gays Or Perverts."

The change to Unaffiliated was also based his belief that the attacks of September 11 were "an inside job" accomplished via complicity from the government, the illegal war against Iraq which was fomented on outright lies, the shredding of our Constitution through the USA PATRIOT ACT and the Military Commission Act of 2006.

He's the type of guy you either love or love to hate. One thing's for sure, he says what he means and means what he says! This, above all else, pleases his listeners and drives his critics crazy. Go get'em, Hal!



Why wouldn't Bernanke call hal?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

They don't hold a trillion in cash, they hold a trillion in bonds. They cannot unload them the way any of you are suggesting.
The thing China can and may do is move away from the dollar and try to take payment in another form for a while.

This story is a joke. ( nothing personal Master Ho)

Hal turner has been reading GIM because his spin is the same thing we have been saying for months that could and likely would happen some day.

The only thing I can say about Hal Turner is that if he is doing his own research he has made a good decision in trying to compile a "theory" off the GIM board.

His credibility in reporting is legendary fantasy.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

turner isnt the most credible person BUT i dont think he is far off on this one, IF it IS true youre certainly NOT going to hear this on CNN, china dumping dollars is a big deal, and it is GOING TO HAPPEN, if not now...soon.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Is it possible that China was the one that called the meeting and Bernake and company went there to try to prevent the sell-off and arrange a deal?

If no deal was reached, pushing down metal prices creates a super-quick profit for those in the know in the event that Monday becomes DDay

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I don't think CNN has the gall to completely ignore this. It's too big. Ignoring it would seriously tarnish what little credibilty they have left.
I do agree that the dumping is inevitable.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

UPDATE 10:18 PM:
The Washington Post confirms. . . .
"U.S., China Clash On Currency" <small>Click Here</small>


http://www.washingtonpost.com/wp-dyn...121400681.html

Hal claims that as proof? Whatever.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I wish there was a Youtube video showing Bernanke coming out of that
meeting all pale and sweaty. That'd be priceless.

Even if this story is crap, which I can't imagine Hal Turner or anybody else being insane enough to just make up, it's gonna likely cause some interesting reverberations in prices come Monday.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Perhaps we'll see a 2008 pres candidate with a trillion dollar treasure chest. I'd vote for him/her. Wouldn't you?

Let's see there has to be some competition to Soros right?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Well if true Im prepared. I just bought 3 Lunars and a Panda. I figured they should be worth around 10,000 by Monday?:beer:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Thank you demosfen, curtman. Let's keep some perspective and look at this rationally.

The first thing I thought was they don't HAVE 1 trillion in dollars. They have TOTAL reserves approaching 1 trillion.

That tells me the person who is talking doesn't really know what they are talking about. If someone gets such a basic fact wrong, how does anyone just accept what they are saying?

I don't believe the Chinese are out to crash the US just yet.

Remember, they have massive problems, as well as massive reserves. They don't have nearly enough domestic demand to support their economy. Hell, there is evidence they have overcapacity in many sectors, to the point that they don't have enough EXPORT demand, either.


Their plan is to build domestic demand gradually. At the point domestic consumption approaches levels in the US, they might want to crash us out of the way.

This is just fear mongering and bunk. I don't doubt they were happy to remind the US about their position as the US mortgage holder. All they really have to do to mess us up badly is stop buying new bonds, never mind
dump old ones.

Additionally, how would they ever sell a trillion in bonds? By the time they had dumped, oh, 100 million, 200 million, a quarter billion, they would be junk anyway. They couldn't dump a trillion in bonds, even if they had them. And they don't.

Can we approach this rationally and not jump on the first rumor bandwagon that comes along?

Oh, it's GIM. So the wackier the rumor, the more it MUST be true!

LG :smokin:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Geez louise, can't even have fun w/whacky rumors anymore...

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Breaking News:
Rothschild and Affiliates have purchased one trillion bondage certificates
and have issued new rules requiring every US citizen to report to the Mississippi Plantation first thing Monday morning to start picking cotton.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I can't figure it out, the ones you think people MUST be joking about, they are dead serious. The ones you think they are serious about , they are joking.

It's a bizarro universe!

LG :bird:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

They will sell all these $$$$ to DEBT COLLECTING AGENCIES like .40 cents on a $:cheerful: lol
just kidding

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Like PUBLIC ENEMY says: Dont Believe The Hype!

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

True Untrue I don't know but this little paragraph explains 1000yrs of history being ignored as the Chinese and Russians form an alliance and conduct Joint Military Exercises.

..."Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they "would not be inclined to sell oil to any particular nation that intentionally caused such a collapse."

This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.

The OPEC officials even went so far as to say "Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off.".."

The Russians have taken their Oil production and used it to win China over in case there is a need to dump the dollar.

First the Russians block the attack on Iran by opening their Oil Burris then they ensure Chinas supply of Oil in case of a Middle East Retaliation.

Russia is really a Pain in the US's Butt right now.

I guess the cold war was profitable for Russians as they are driving toward it so fast.

Electric-Amish

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

al�lege Pronunciation (-lj)
tr.v. al�leged, al�leg�ing, al�leg�es
1. To assert to be true; affirm: alleging his innocence of the charge.
2. To assert without or before proof: The indictment alleges that the commissioner took bribes.
3. To state (a plea or excuse, for example) in support or denial of a claim or accusation: The defendant alleges temporary insanity.
4. Archaic To bring forward as an authority.

:banana: G-Khan is allegedly going to give all of us AGEs for Christmas!!! Yippie!!!

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

It is in the interest of the Chinese for the dollar to be high because this ensures that they can continue dumping cheap Chinese made goods onto the US market. If the dollar "collapses" the Chinese factories will take a 75% hit because they wont be able to sell thier junk. The relatively high US dollar enables this whole process. I dont believe this story at all.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

When all is said and done and all fiat is revealed for its true worth the winners will be determined by how much bullion they possess. No matter when the fiat creation falls or which one first the masses will wish to preserve wealth in Food, Rum, Silver & Gold.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

And TP. Don't forget the TP.



I wonder how much it would cost to deliver a container full of Charmin to ones property? I guess it would be better to purchase one's own TP making machine.

LG :cool2:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Over several years of working in the woods I can say that I've had more than a few shirts with there pockets and sleeves ripped off.

So it seems LG, there is some merit in your concern. TP is a significant asset. :tongue:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I haven't read such a piece of blatantly stupid statements in awhile now.

Thanks for that.

There are so many reasons that they can't and won't do something such as this .

You don't just walk up to a CB and say I want to exchange a trillion of anything.

The Euro zone doesn't want the increase in value, so they would nix it.

Negotiation, no way, as there economy would seize up and the peasants would revolt after all exports shut down. The rest of the world would join in on stopping the importing of their goods.

Even if possible, their holdings would be halved before they could accomplish a dump, and less as they dump. Might end up with 20-25% on the buck if that. Markets are pretty good when it comes to sniffing out rats and reacting accordingly.

etc, etc,

'If someone considers you stupid, it is better to stay quiet than to open your mouth and remove all doubt'

The guy got what he wanted, shock journalism with no substance except to plaster your name around.

I know, I know, I will shut up now. :afraid:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

The threats and rumours of the PRC dumping the USD are always great fun. The conventional wisdom is that the Chinese are reluctant to dump USD because they still need a stong dollar for the US to by their exports.

I never hear any discussion of Chinese domestic considerations. Is it not possible that the PRC would want to reduce their growth? By giving their own financial base a shock, it would cool off the demands of labour for better conditions, reduce the rural exodous to urban centres, reduce North / South tensions and inequalities, and forstall growing democracy movments. Some won't rock the boat if they are worried where their next meal is going to come from. A shock like the collapse of the USD would assist the PRC in keeping their new economic elites in line.

Is it not possible that for short term Chinese domestic reasons, the Chinese might welcome the collapse of the USD? And remember, to the Chinese, short term is about 100 years!
Just as the US found certain domestic advantages to 911, the Chinese might also find a USD collapse useful to them.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

How about this,

The Chinese take the meeting and concern about the trade imbalance to heart. They decide the only right (notice I said right and not fair) thing to do would be to increase their buying of American products.
They contact all the American mints and buy forward the production of gold and silver bullion. This is only after they invest heavily in the mining and minting companies themselves.
Problem solved.

Of course Newtons Law still applies but, this leaves them right where I would want to be.

Remember one thing, they are playing against the masters and to this date, in history the masters have never lost.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Nice play Curtman. But how come the Arab nations have not usually been able to use their vast petro dollars to buy more political and economic influence In the US when it is generally agreed that the Israeli lobby has more power than anyone in the US? Just wondering....

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I agree with the above to a degree... China would not be stupid to dump lots and lots of dollars.

I also agree with Magnum P.M. in that a short time period is like a 100 yrs. to China.

I think they will base their response to what the market takes. They have full bubble control.

Maybe Ben will collect it up and throw it out of his helicopter?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Look for oil to rise.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

A couple of quick thoughts..........<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p>
<o:p></o:p>
I did not post this as a fact - I posted it because I got it (and not From Hal Turner, of whom I am not particularly a fan) and thought - even if it's remotely possible - and it is - maybe not PROBABLE, but possible.......that it would make for good discussion.<o:p></o:p>
<o:p></o:p>
And it has.<o:p></o:p>
<o:p></o:p>
Curtman - I am not offended in the slightest.<o:p></o:p>
<o:p></o:p>
Secondly, yes, I agree with most of you - it needs to be substantiated.......and if it is Monday, you read it here first!<o:p></o:p>
<o:p></o:p>
HOWEVER - could they dump all those dollars and move into euros and gold........<o:p></o:p>
<o:p></o:p>
Of COURSE they could - tho not in a week.......over time........maybe a few years.........they are not stupid.........<o:p></o:p>
<o:p></o:p>
Could it be a piece of propaganda to tell Paulson, friends and world they are not impressed with this trip and the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:country-region><st1:place>US</st1:place></st1:country-region> message - of COURSE it could.<o:p></o:p>
<o:p></o:p>
But on the slight chance its real - or even if its not - and the general public hears and buys into it.......the emotional response of the public COULD affect the dollar or stock market or gold and silver..........<o:p></o:p>
<o:p></o:p>
We'll see........but just cause someone posts an article does not mean they beLIEve every word of it!

Cheers!<o:p></o:p>

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I've been following this on several boards since the "news" first broke.
I'm not sure exactly what to think but here is an interesting observation from a poster on another board:

"Has anyone paused to think that the money and profits are only the means to an end, with the end being the hyperpower of Asia?

If the goal is to control Asia militarily/economically, then they would have to weaken the US. The greatest asset the US has to maintain their hyperpower status is the dollar.

Ergo, the accumulation of greenbacks was never the goal but rather the means to an end. Basically a poker chip on the global chessboard.

Americans tend to have a bit of a solipsist view of the world. The Asians in general and Chinese in particular, have a far different mindset, goals, tactics and they are not as concerned about profit as an end but rather just the means to achieve their end.

The current Chinese economic "reform" is similar in scope to Lenin's "New Economic Programme" that brought economic "reforms" to fool the West.

Admittedly, the Chinese are much more successful. They even put themselves at a somewhat economic disadvantage (especially so in the 80's) in return for getting Western investment.

The Americans have relocated countless industries to China. THis practically gave China skilled workers paid for with US dollars. Infrastructure and equipment brought into Chinese territory and removed from US soil and countless dollars on TOP of that to buy their own tools, supplies, et.al.

China holds all the economic cards. The greedy short-sighted CEO's will soon be left holding the bag. China has ZERO safeguards to ensure property rights. When the time is right for them, they can, in one fell swoop, nationalise US companies and their infrastucture.

THe result would be essentially free industrial equipment for their use. This equipment was brought FROM the US so not only do THEY have it but the US DOESN'T! Plus, they get an army of highly skilled workers paid for with the hard-earned cash of the American consumer.

As a result, they could lose half of their "investment" in the dollar and still come out ahead.

The Chinese are ahead of us by 5 moves on the geopolitical chessboard and are a step away from checkmate while America is gloating over what they perceive as an imminent victory.

Does this make sense to anyone else here?"


Also:

They have been doing this for over a year!!!!!

"Many of us ECONuts have been warning you guys here that the ChiComs couldn't find assets to purchase here (Remember the Unocal deal gang?) so they went out and started purchasing commodities. Now go to www.basemetals.com and pull up the one year charts on the metals.

Then look at gold, silver, uranium, etc. You will see sharp spikes up in the last year. It's not because of speculation, it's because of acquisition. And the Russians and ChiComs are loading up.

You can stock up on base metals and precious metals for 1 of 2 reasons:

1. Long term needs and investment.
2. War..."

Seems logical in a somewhat twisted way to me.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

If I were to give my opinion on that I would be guilty of starting another semitic thread.

I will just say they are not worth it to the powers that be.
China and India's emerging markets are much to huge for the greedy elitist to ignore. We all have a stake in it whether we know it or not.
The Arabs have great wealth this is true however they do not pass much on to the general public, I think Iran does a better job than they do.
Capitalist are interested in money flowing not hoarding. China is playing a capitalist game while holding on to communism to stave off the infiltration and assimilation of an Islamic invasion from their west and within their borders, their people become willing participants to escape communism.
Balls that was a long sentence.
China has a war in its future and if they do not pursue it they will have a civil war.
They plan, to march, or sail on the South China Sea. They will do this while we are tied up elsewhere and gain ground and huge oil reserves in this area without much opposition. They will be victorious at least until they get to Australia where they will be ran back into the Sea.
They will not get a foothold in Australia but the effort will prompt the Aussie's to purge their country of Muslims. Why? Becasue they are there.
I see this happening in the next decade.

I hope that didn't offend anyone.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

We knew that Bernanke and Paulson went to China, but there was verrrrry little coverage beforehand and during. Nothing, nothing, nothing. And then the markets suddenly reacted today in deliberate government intervention to drive prices down, because they know we're jumping out of the frying pan on Monday.

Yeah, it fits. Something about the trip must have gone very badly anyway, because the PPT was out in full blatant corrupt force.

Cover it up, cover it up, cover it up... That's the new American Way. (No offense to Americans here. You know who I mean.)

I also agree with those who think that whatever the Chinese announce has probably been cooking for months behind the scenes, so we need more information before firm conclusions can be reached.

Aaaaagh. Just when housing was coming out of its soft patch... :marchmell :marchmell :marchmell

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I don't know who the heck Hal Turner is but his link to the Washington Post article is old news and relates not at all to this in the RED breaking news. He doesn't list one other source of this so called news - highly suspect. Like someone else said, the Chinese are not stupid they would not announce such a thing in advance especially if they wanted out of dollars - would make the gate they are trying to get out of rather tight with the rest of the herd trying to get out. No doubt China is concerned about the amount of reserves they have in dollars but they aren't going to show their resolution hand.

But still what a head line - got my attention real quick. If such an all in play were to occur all the markets would go nuts.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

AgAuGal:

First according to Hal Turner, the Chinese did NOT publicly make the announcement that they are dumping one trillion dollars. They made that comment to their US negotiation partner, probably as a threat or a bargain chip. And then some one on the US team leaked that information out. It was never a public announcement to start with.

Second, in different occasions, various Chinese officials have openly expressed concern of holding too much US dollar, and desire to diversify. That is not a secret. And China must have been doing something to diversify their dollar holding for quite a while by now. They have been purchasing physical assets world wide, including attempt to buy unocol.

So tehre is some element of credibility in the story.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

FRN's for TP

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I have been scouring the places where I drop Chinese news items to give you a quote but I am darned if I can find it, so what I am about to say is going to be very hearsay...sorry!

A couple of months ago now China informed the US that they were going to sell down a lot of US assets including Treasury bonds as they wanted to buy Euros.

This may be where good old Hal is getting some twisted info.

It is pretty much old news now and would already have been built into the markets.

Sorry I can't give you a better reference for what I have just said.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I dont know how much of a audiance the Hal Turner show has but it wouldnt take much for a rumour like this to take off like a wildfire. Forget for a moment if its true or not. That may not matter. What does matter is how people react to it. From the reactions I see on this board it has created quit a stir. Think how this will affect the average joe on the street who may not look at it with the critical eye of the typical GIMer. News like this is like yelling FIRE! in a fireworks factory. If we see this "news" spreading to other financial forums I would say we might see an interesting reaction in the markets next week.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

"As a result, they could lose half of their "investment" in the dollar and still come out ahead.

The Chinese are ahead of us by 5 moves on the geopolitical chessboard and are a step away from checkmate while America is gloating over what they perceive as an imminent victory.

Does this make sense to anyone else here?"

This makes imminent sense to me. It's not as if the Chinese never realised there were problems with the dollar prior to accumulating a trillion of them.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Do you really reckon TT? He broadcasts once a week from his living room. Most people who hear about it will probably question his street creds. Some have already on this very thread.

I think if it isn't in one of the tabloids or TV news broadcasts then it is likely to be completely unheard by the average Joe/joeline in the street. Hard to create panic when no one knows about it! But ya never know it might be a slow news day Monday!

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Panic? I doubt it. This thread belongs on the front cover of the National Enquirer next to the alien babies they found in atlanta...

The real message is china is going to do what china is going to do and Uncle Sam can just go home and watch. They have no more respect for us than you have of that drunken inlaw that thinks he is something and is not. I am really embarressed for this haughty, bankrupt nation we live in.

When the chinese premier comes to visit the USA he goes to see Bill Gates first and could care less about Washington DC.

We are the drunk has-beens at the christmas party. The rest of the world sees us as we really are. The only thing we have is a BIG GUN (our military) and that is proving very ineffective in the middle east.

Pride cometh before the fall. China doesn't and won't have to do one damn thing different then they are doing and they know it.

I'd like to know what really went on at those meetings. Asians have their own way of being confrontational and while playing the polite hosts I bet they couldn't wait for their unwelcome guests to just go home.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

http://www.glumbert.com/media/hahahaamerica

Long, but I liked it.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Living room broadcast eh? I guess hes pretty much a bottom feeder in the radio world. Your destroying my fantasy here Ann of 50,000 per ounce gold. :yippee:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Very well said.

I've been thinking almost the same thing but only in segments.

You put it all together, at least for me.

Thanks!!

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

All of this is a joke, so we can :Zzzz:.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I have to agree with Trousers, and it doesn't matter if he broadcasts from his living room or not. He does have a large enough following to have a impact on the markets, mainly because nobody really knows the reason this US contingent went to China. (To give them a lesson in economics?)

And then the lack of news coverage, other than the usual BS after the meeting.

The Washington Post story was also grabbing for straws, trying to fill copy with no factual information of what was actually going on. But one paragraph was very telling.

After standing by as U.S. officials criticized her country's economic policies in the media during the past week, Wu set the tone for the meeting with assertive introductory remarks that spanned 20 typed pages and 5,000 years of Chinese history.

After that, the Post never explains what the "tone" was that Wu set, but it sounds ominous and forebodding. But the story never explains it. I believe there was more of an explanation, but was nixed by the Editor so as to not panic the financial markets.

But the story goes on to say that Paulson followed with a speech that was equally assertive. That is not good. That cannot be good. Who has who by the short hairs?

I say that, regardless of the Hal Turner story, the Chinese are going to quietly, but purposely, begin to dump US Treasurys, which is the reason why Larry, Moe, and Curly went over there in the first place. I do not believe their trip was successful. We will eventually hear what really happened, and it ain't good.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I suspect the reason they went to China was to create the illusion that these issues haven't already been decided behind the scenes.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Why did the U.S. go to China?

Why would anyone go to see their largest creditor (for example, your mortage holder)?

1) You want to pay them back
2) You want to borrow more
3) You can't afford the payment and need to re-negotiate

I would say that number 1 can definitely be taken off the table in this case.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Hal Turner is a patholical lair. Everytime someone posts something he says it turns out to be a hoax.

Who listens to this guy? The first time I ever heard of him is when he said his scuba diver buddy went under and collected samples from the levee and sent them for analysis which showed explosive residue.

I'm still waiting for the follow up on that one. :cheerful:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

This may be overly optimistic�..but�.

China wont dump a trillion.

And they sure wouldn�t announce it on the hal turner show it they were planning to.

My bet is that china will wind up with the lions share of the north American super highway system. They will control it, and collect tolls to get re-paid�..

Just like spain is headed for controlling the trans-texas corridor.

China is already knee deep into the deep water ports in mexico�..it makes sense that that would be extended to the roads in the former usa and cananda.

According to the CFR, china is slated to basically run the world, after the us is taken down��..as far as I can tell, they�re usually right.

The gangsters that run the world have always turned things of no value�.like a fiat currency��into owning real things��.like property.

I'm going back to my rubber room now.....have a nice day.

..

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

FROM ANOTHER BOARD THAT POSTED THE ARTICLE AFTER WE DID - THEIR WRITER'S COMMENTS IN BOLD ITALICS.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p>
<o:p></o:p>
Here's the update from this morning on that same website (I can't put all their news on our homepage or else I'm stealing).

Do I know if it's true? No, I don't have CNN's staff. But some of this makes some sense when you consider the Herculean effort the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:country-region><st1:place>U.S.</st1:place></st1:country-region> Treasury is taking to prop up the dollar, and the entire fiscal cabinet going to <st1:City><st1:place>Beijing</st1:place></st1:City> (completely unprecedented).

UPDATE <st1:time Hour="0" Minute="7">12:07 AM EST</st1:time>, <st1:date Month="12" Day="16" Year="2006">Saturday, December 16, 2006</st1:date>: Additional sources, one in the U.S. Commerce Department and another in the US Treasury have confirmed the initial report above and referred me to another, Third, source in the Pentagon.
<o:p></o:p>
Both the Commerce and Treasury Sources report that while China will not be able to simply trade their Dollars for other paper currencies, they will spend their U.S. Cash on commodities such as gold, silver and Rhodoium as well as military hardware; ships and planes, placing large orders and paying for those orders with the one point one trillion in cash dollars they possess.
<o:p></o:p>
Extreme Military Concern
<o:p></o:p>
In speaking with the contact at the Pentagon, I am able to now report the Pentagon views this currency-killing as a cunning military aspect to Chinese plans:
<o:p></o:p>
The Pentagon says that while <st1:country-region><st1:place>China</st1:place></st1:country-region> has a 2 Million man army, they lack the logistics and heavy lift capability to move that army and supply it. They can, however, get that military to <st1:country-region><st1:place>South Korea</st1:place></st1:country-region> and to <st1:country-region><st1:place>Japan</st1:place></st1:country-region>.
<o:p></o:p>
The Chinese see that the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region> Military is over-stretched and almost exhausted by its globe trotting Commander-In-Chief. They feel that by intentionally destabilizing the dollar, the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region> economy will fail, putting tens of millions of Americans on the unemployment line and putting unbearable pressure on the US Government.
<o:p></o:p>
Then, with the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region> economy in shambles and its manufacturing base eroded by a steady stream of manufacturing plants moving out of the US., the American government will be too occupied with troubles at home to do much internationally. America will be in no position to challenge China, allowing the Chinese to act militarily elsewhere in the world;

Further, if the U.S. attempted to intervene against any Chinese military action, the only plant in the world which can manufacture the specialized gyros needed for U.S. Cruise Missile guidance systems, is now located in. . . . .China.

<st1:country-region><st1:place>China</st1:place></st1:country-region> could prevent that plant from shipping to the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region>, and once our arsenal of cruise missiles was depleted, it would take a long time to re-tool a plant to make more gyros and resupply cruise missiles for battle. The Chinese feel they could accomplish certain military goals before the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region> could re-tool.

They are also confident the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region> will never "go nuclear" as long as the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region> itself is not attacked.
<o:p></o:p>
The Pentagon source went so far as to say "Even if China was to lose the entire one trillion in cash to a collapse of the Dollar as a currency, they will have succeeded in taking the U.S. off the world stage as any type of effective military or economic power -- without firing a shot!" A 'classic' Sun Tzu paradigm of victory - the art of fighting, without fighting.

The crippling of the <st1:country-region><st1:place>US</st1:place></st1:country-region> is a highly desirable military benefit for <st1:country-region><st1:place>China</st1:place></st1:country-region> at a relatively cheap price since it will leave their human capital and infrastructure assets in place; assets they know they would lose if a hot war erupted with the <st1:country-region><st1:place>U.S.</st1:place></st1:country-region>.


<!--EndFragment -->

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

That last post is what I would do if I were China. And I would not wait until after the 2008 Olympics, like some folks think. I would want the USA to show up at my Olympics with their tail between their legs and then I would show off the new china to the whole world..

Interesting scenerio..

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I will not post these articles - because I am not sure where they are coming from - but I just read one that says OPEC is about to drop the dollar........and another, with a photo, about a bank in New Jersey placing a $1000 limit on withdrawals, which created a huge line of people worried the bank might fold and they might not be able to get their money.

As I posted earlier - I am not sure how accurate any of this is - but its interesting and brings to the various markets the one thing I tend to watch the most - emotions!

Fear and greed! Technicals are important but its human emotion that can send things up or down in a heartbeat!

Even if its all bull - and I am not sure it is - it should certainly make for an interesting week.

If I get any articles that indicate a source - I will post them.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

:call: yeah...just read it on GoldIsMoney...git down to the bank pronto!!!

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

If someone pulls all my dollars from the bank, I will refuse to pay taxes this year.:rofl:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

You nailed it ..........



All the chinese will do is safe guard their dollars by selling them in order to buy commodities around the world and will invest to companies around their world..they are not gonna dump them for euro it is impossible ..


but nothin stops them from buying comodities as fast and as many as they can before the dollar plunges some more. Nothing will stop them from not accepting so many dollars in the future.........................the chinese dont just sell to america they sell to the whole world for which america is a minority:hahaha:


why do people really think that the us is the centre of the world ??


The chinese can convert a huge part of their dollar reserves to commodities etc fold the dollar and carry on selling their junk to the rest billions of people on the planet earth .....do you really think that china would be better of holding a currency of a country which is loosing cred as a business to the whole globe ?


In the past people used to think american cars are quality......now people avoid them like the plague.


In England we say that a FORD stands for: Fixed Or Repaired Daily....

Argentina and Brazil from 2007 without dollar
 

Argentina and Brazil from 2007 without dollar

BUENOS AIRES, 13 December 2006 - Argentina and Brazil plan to use the U.S. dollar from middle 2007 no longer as a mediator currency for its trade exchange. The import-export-traffic between the largest Mercosur-partners is supposed to be completed then directly over the local currencies � Argentinian pesos and Brazilian actually �. The last details are supposed to be cleared in the headquarters bank conference taking place on Friday of the Mercosur-countries, is named it out of Argentinian government circle.

Secretary of Commerce Felisa Miceli (photo) and its Brazilian colleague Guido Mantega had brought in August the project into the rolling. The trade exchanges amounts to presently annual 15 billions of U.S. dollar (U$S). The direct statement in peso or actually the reduction of the transaction costs would have after expert statement as a consequence, but would have also a higher demand after the local coins as a consequence.

The headquarters banks of both countries have worked for some time already at the compensation mechanisms, that should enable the direct statement of the bilateral trade currents. Parallel in addition the responsibles prepare also the arrangement of a peso-actually-market for future-option.

original text is in german:
http://www.argentinienaktuell.com/ne...hp?newsId=1387

Foreign Ministers of Mercosur nations meet
Friday, December 15, 2006 (Brasilia):
http://www.ndtv.com/morenews/showmor...+meet&id=97958

Five Profit Bonanzas from a Dollar Decline (by Martin Weiss)
http://www.moneyandmarkets.com/press...d=616&cat_id=6

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Did you know that Iran is the biggest oil supplier to China? Now Iran will only accept Euro from the Chinese Government, guess what?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

I never advocated that hal is right ... as to when.


But it is a cetainty that it will happen

U.S. dollar facing imminent collapse?
 

U.S. dollar facing imminent collapse?

Fed in bind as Paulsen, Bernanke head to China
Posted: December 10, 2006
5:38 p.m. Eastern

Jerome R. Corsi

Even as the stock market is hitting new record highs almost every day, the Federal Reserve and Treasury Department are quietly coordinating a devaluation of the dollar that the Bush administration hopes will be a slow decline rather than a dollar collapse.

This week, in an unusual move, the Bush administration is sending virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Dec. 14 and 15.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are leading the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation will be Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.

The Bush administration wants to get China's cooperation in preventing a dollar collapse. That's the conclusion of John Williams, an experienced professional econometrician, who writes the "Shadow Government Statistics" blog.

Williams has re-created M3, a money-supply measure whose data the Federal Reserve simply stopped publishing after issuing a technically worded March 2006 announcement.

Williams reports M3 is currently growing at close to a 9.6 percent rate and trending higher, compared with an 8 percent rate early this year, when the Fed quit reporting the measure.

"The Fed is pumping liquidity into the U.S. economy," Williams told WND, "and the Fed evidently did not want the markets to follow too closely what the Fed was doing with the money supply."

China today now is holding a historically unprecedented $1 trillion in foreign exchange reserves. During the Thanksgiving holiday, an announcement by China that their central bank planned to diversify foreign-exchange holding away from the dollar caused the dollar to drop in value on international currency markets. Since then, the dollar has hit a 20-month low against the euro.

"This was almost an orchestrated announcement," Williams claimed. "Around Thanksgiving the markets were thinly traded. I'm not sure who was playing games there, but the signal was clearly heard."

"You're dealing with mass psychology here," Williams argued. "The central bankers around the world know they are going to take a hit on their dollar holdings. None of the central bankers want to start a dollar panic, but none of the central bankers want to be the last out of the dollar, either."

Williams explained that the Federal Reserve is in a bind.

"Raising rates would kill any chance of avoiding a recession, but in terms of the dollar, we can't raise the rates fast enough when the dollar starts to slip quickly."

Are we experiencing a dollar collapse?

"Not yet," Williams answered. "I believe we're going to have a dollar collapse, but the Fed is going to do its best to slow play the dollar's decline in value, so that it takes a year or two for the dollar value to reach its low point."

Williams explained the risk of collapse the dollar faces:

"There will be a central bank, most probably in Asia, who will start the move away from the dollar and when it happens, you're going to see other central bankers covertly trying to follow. The move will magnify very quickly and it could become a full-fledged panic and a dollar collapse."

The Fed is struggling right now to contain inflation and stimulate economic growth. All the Fed is doing right now with all their grand policy shifts is using a lot of propaganda and market massaging to try to prevent a financial panic."

Recent reports have shown that U.S. gross domestic product growth slowed to 1.6% in the third quarter, the lowest in more than 3 years.

Will a declining dollar help narrow the U.S. trade deficit with China?

"You could take a 30 percent decline in the value of the dollar," Williams argued, "and it wouldn't make much of a dent in our trade deficit with China, not as long as Bush administration trade policy continues to be one-sided in favor of China."

"The Fed is faced with an impossible circumstance with the trade and budget deficits being run by the Bush administration," Williams told WND, "and they are just playing games with the markets and the public by not publishing M3, the broadest measure of money supply and the best indicator we have of long-term activity."

M3 is the broadest measure of the total money in the economy, including checking and savings accounts, cash, time deposits, and money-market funds. Economist Milton Friedman, one of the key economists contributing to the conservative theories that led to the development of "Reaganomics," argued that money supply is a key measure correlated both with economic growth and inflation.

http://www.worldnetdaily.com/news/ar...TICLE_ID=53311

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Iran has 70 pct of reserves outside dollar -report

http://asia.news.yahoo.com/061214/3/2udes.html

TEHRAN, Dec 14 (Reuters) - Iran, facing political pressure from Washington, has been shifting its reserves out of dollars since at least 2003 and now holds 70 percent 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 on Wednesday.

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 now 70 percent of the total 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. Senior central bank officials have previously declined to give the total amount of reserves or detail the mix.
Khatami-Yazd's comments, originally published by a local news agency, were also carried in other newspapers.

This month, a state-owned newspaper said U.S. dollars may now make up less than a third of Iran's foreign reserves, down from 40 percent. Iranian officials have previously said the Islamic Republic was seeking to do less business in dollars.

Iran, the world's fourth largest oil exporter, is under pressure from Washington, which has clamped down on financial transactions with Tehran to punish it for alleged support for terrorism and nuclear bomb ambitions. Tehran denies the charges.

Khatami-Yazd said it was better for Iran to switch its reserves because of the U.S. pressure and also because of the current weakness of the U.S. currency.

"Considering the dollar situation in the last year, even if there were no sanctions, Iran should have changed its currency basket," he said.
The United States imposes sanctions on U.S. trade and investment in Iran but has also been trying to isolate Iran financially by pressing international banks to cut ties.

Bankers in Iran say most foreign banks have stopped dollar business with Iran. Most transfers of funds by foreign banks now take place in euros or other currencies, they say.
Economy and Finance Minister Davoud Danesh-Jafari said in November Iran was not worried by such restrictions and was becoming less dependent on the dollar for business transactions. Officials also said Iran was taking some oil payments in euros.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Be practical. When China dump 1 trillion (fast and large), where is the buyer?

What about in the process of disversification China shorts big (for example gold, silver and other currencies) and then buys big?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Actually, it may not need to be that the Chinese dump their reserves, in whatever form that reserve may be in, for it to seriously affect the US. All they would need to do is not participate in Treasury auctions for a few months. If they refuse to roll-over what they have, or repatriate the USD in Treasury auctions, then that would be, imo , just as effective as if they dumped their reserves in a gorge.

I believe it was last summer that China lessened their purchases of FED debt...they may just need to make a public announcement that they are re-considering their participation in the upcoming auction. Any one know when the next one is? Might be next week....

Dollar will continue to depreciate
 

Dollar will continue to depreciate

At the end of last month, the US dollar against the Euro depreciated to its lowest in the last 20 months on the New York Foreign Exchange Market, while the dollar against the British pound depreciated to the lowest in 14 years. On Monday, the Euro closed at 1:1.3251 against the dollar and the previous day it closed at 1:1.3200. The pound closed at 1:1.9587 against the dollar and the previous day it closed at 1:1.9525. The dollar to Swiss Francs also fell to 1:1.2014 from 1:1.2049 the previous day.

The weak dollar is a reflection of the long-term depreciation of the US dollar. Over the last three years, the US dollar against the Euro has depreciated by 35 percent and against the Japanese Yen, 24 percent. Since February 2002 against a package of currencies, the US dollar has depreciated by 23 percent.

Various indicators suggest that the US dollar will continue to depreciate. Why?

One of the main reasons for the depreciation of the US dollar depreciation is the slowdown of the domestic economy.

Ge Huayong, Executive Director of the International Monetary Fund in China, told reporters that from a macro-economic perspective, the US dollar will continue to depreciate because of the global economic situation. Various indicators suggest the US economy will slow between the end of this year and the beginning of the next while there is good reason to expect European economic growth. The Japanese economy is showing signs of a revival while the emerging market economies of countries like China and India continue to have strong growth momentum.

The changes in the global economic situation have led to a change in the floating direction of foreign investment, another factor in the depreciation of the US dollar.

Ge Huayong said that from a micro-economic point of view, the main reason for the depreciation of the dollar was market speculation on forex reserves. It was anticipated that some countries with large foreign exchange reserves in US dollars would be looking to reduce their US dollar reserves. The European Central Bank increased the interest rate again to encourage investors to sell their dollars and buy Euro. The US real estate market has slowed leading to a significant downturn in consumer confidence.

Another reason for the depreciation of the dollar is that the US government has not yet intervened. Analysts say the US government has been compliant in the depreciation of the dollar. The depreciation of the dollar promotes the export of US products and reduces trade imbalances. In the long run, the stimulus of demand and an increase in savings will help reduce the double deficit to a point where it is sustainable. In the meantime, the depreciation will substantially reduce the US' foreign debts. The advantages of the depreciation outweigh the disadvantages, so the government is unlikely to intervene. It is interesting to see that the US government supports the depreciation, but that both US Treasury Secretary Henry Paulson and his predecessor John W. Snow believe that a strong dollar is in the interest of America.

Some American researchers believe that the policy of a strong US dollar has died. The US hopes the dollar will depreciate in an orderly fashion, but are not willing to announce this openly. If they did so, the rate of depreciation would accelerate and the country is unwilling to let the dollar fall so quickly.

US decision-makers believe the depreciation is a good way to resolve imbalances in the US economy. However, the American people are complaining. Domestic goods are very cheap, but due to depreciation, imported products are increasing in price. More importantly, it will be more expensive for Americans to travel to Europe, Japan or any other country. Many people have already abandoned their travel plans to Europe because of the expense.

The depreciation of the US dollar and the appreciation of the RMB have reduced China's export competitiveness. Due to a decrease in the import of Chinese-made Christmas gifts to the US, there is a shortage of Christmas gifts on the US market. It is expected that Santa Claus might not have so many gifts to send out this year.

The US dollar cannot depreciate too quickly as this would be a big problem for the world economy. British economists say that if the US dollar depreciates too quickly, it will affect the "global bubble". It will cause new inflation pressure so that the banks will not be able to shield the collapse of the real estate market. If that happened, the whole world would be affected.

Ge Huayong agrees with this. He says the US dollar must depreciate gradually in an orderly fashion by just a small margin at a time so as not to affect the world economy. If the dollar depreciates on a large scale, the global economy would have to bear the consequences and emerging economic powers like China would take a heavy blow as much of their foreign exchange reserves are in US dollars.

However, Mr. Ge believes that there are many positive things about the US economy and the complete US financial market which are keeping the dollar stable and the possibility of a crash to a minimum.

By People's Daily Online

http://english.people.com.cn/200612/...15_332934.html

A CURRENCY IN DECLINE - How Dangerous is the Dollar Drop?
 

A CURRENCY IN DECLINE - How Dangerous is the Dollar Drop?

December 12, 2006

By Christian Reiermann
Is an end of an era looming in the foreign exchange markets? The dollar has been depreciating against the euro for weeks. Currency experts and the German government don't yet see this as cause for alarm. The US currency's role as a lead currency isn't as important as it used to be, they say.

Like most central bankers, Jean-Claude Trichet, the president of the European Central Bank (ECB), has a penchant for cryptic comments. Injecting a certain degree of incomprehensibility is a signal to the professionals that he's competent. And when it comes to laymen, industry jargon has the desired effect of generating the necessary respect.
Last Thursday the public was treated to yet another example of Trichet's convoluted speaking style. A number of risks, the ECB president said, could jeopardize a generally favorable economic outlook in the euro zone. They included, according to Trichet, "concerns regarding possible uncontrolled developments triggered by global economic imbalances."

What Europe's most powerful protector of the currency was actually saying was this: The gradual decline of the dollar in the foreign currency markets in recent weeks could pose a threat to the economy. What Trichet was also trying to broadcast is that the ECB has recognized and is aware of the threat.

Nevertheless, the European Central Bank in Frankfurt again increased its key interest rate on Thursday by a quarter percentage point to 3.5 percent, which makes the euro more attractive to international investors. The central bankers had no choice but to take the step, having already announced their intentions weeks ago.

Experts have been predicting for some time that the dollar would eventually go into a nosedive, and now that time seems to have come. The US currency has lost five percent of its value against the euro since late October, and 13 percent since the beginning of the year. The euro is currently fluctuating around a value of $1.33, which is only 3 cents away from its all-time high in 2004. And yet Trichet's counterpart Ben Bernanke, the chairman of the US Federal Reserve, has done nothing but look on as the dollar plunges.

A sea change appears to be taking place on the international financial markets. For years, global capital flowed in only one direction, with $2 billion going into the United States every day. Investors viewed the world's largest economy not only as a bastion of stability, but also as a place that promised the best deals, the most lucrative returns and the highest growth rates.

The Americans, for their part, welcomed foreign investment. For them, it was almost a tradition to save very little and spend more than they earned -- essentially achieving affluence on credit. Foreigners financed the Americans' almost obsessive consumer spending, which spurred worldwide economic growth for years.
Because the US government was unable to fall back on the savings of its citizens, it too was forced to finance its budget deficit with foreign capital. Both consumer spending and the federal deficit kept the dollar high, because the rest of the world was practically scrambling to invest in the United States.

This phase seems to have come to an end, at least for the time being. "There are fundamental weaknesses in the American economy. This could not continue in the long term," says Alfred Steinherr, chief economist at the German Institute for Economic Research (DIW).

Investors pulling out

Investors worldwide are becoming sceptical and starting to pull their money out of the United States. They have realized that a people and a country cannot live beyond their means in the long term. The US dollar's exchange rate is starting to crumble as a result of this withdrawal.

The depreciation is causing growing concern about what will happen to the global economy if the United States loses its role as an engine of growth. If German cars, machinery and services become more expensive, will the German economic recovery end before it has really started?

The German government isn't worried yet, at least not officially. Nevertheless, experts in the finance and economics ministries have been keeping a close eye on developments. Although they continue to believe that the changes still fall within the scope of long-term averages, they don't rule out that the situation could worsen.

They believe that a first critical threshold for the competitiveness of the German economy will be reached at an exchange rate of about $1.36 per euro, and that Germany could see major difficulties at rates in the neighborhood of $1.50. If there is turbulence in the foreign currency markets, the government in Berlin will find itself in an especially challenging position. In early 2007, Germany will assume the chairmanship of the so-called G8 group of seven major industrialized nations plus Russia.

Worried about the dollar: The guardian of the euro, European Central Bank President Jean-Claude Trichet.

The G8 has repeatedly engaged in crisis management to deal with problems in the international financial system. It did so in the 1980s, when the combined forces of the G8 were needed to put a stop to the soaring dollar. It stepped in with equal verve a few years to forestall a decline in the American currency with the so-called Louvre Accord.
There are two principal causes behind the most recent development. Both have to do with the fact that Europe is becoming more attractive for international investors compared to the United States. On the one hand, interest rates in Europe and the United States are moving in opposite directions. "The ECB will continue to raise its key rates next year, whereas interest rates appear to have peaked in the USA," says Joachim Scheide, an expert on the economy at the Global Economic Institute (IFW) in the northern German city of Kiel. This means that financial investments denominated in euros are yielding higher interest and are in greater demand internationally, which in turn leads to a rise in the euro.

The prospects for growth are also shifting. The US economy is cooling off. The government recently lowered its 3.3 percent growth forecast for 2007. If Americans consume less as a result of a decline in foreign capital investment, the United States could even face a prolonged period of more modest growth.

Germany has shed 'sick man' image

By contrast the euro zone economy is robust. Germany, in particular, has surprised many with a stream of good economic news. Unemployment dropped below the psychologically critical threshold of four million in November. The Ifo business climate index, which measures the expectations of businesses, is at its highest point in 15 years, while consumer confidence has reached a five-year high.

In the last quarter of this year Germany, long considered the sick man of Europe, will have transformed itself into an engine of economic growth. According to analysts at Postbank, Germany's annual growth, projected at 3.4 percent, will even exceed that of the United States this year.

This is the kind of news that fuels the expectations of investors who now prefer to invest their money in the euro zone. The result is an increase in the exchange rate for the European Union's common currency. But how will the decline in the dollar's value affect future economic development? Could it cause a major imbalance in the global economy, or will the global economy, and Germany, get off lightly?

Pessimists are quick to come out of the woodwork whenever a major shift in the financial markets approaches. Many economists and bank analysts, especially in the United States, believe that the correction will happen very suddenly, with the dollar depreciating by 10 to 30 percent within a short period of time.

This would inevitably cause an adjustment crisis. Growth rates would plunge worldwide and a global recession, coupled with a drastic jump in unemployment, could follow.

This doomsday scenario is by no means the majority view. Some experts, especially in Germany, are more optimistic. "The US trade deficit has grown in the course of a few years," says IFW expert Scheide. "It will also gradually decline over a period of several years."

Scheide expects the dollar to lose another 10 percent in value against the euro in the next five years, a scenario that would be much easier to handle for the German and European economies. Companies would have sufficient time to adjust to changes in exchange rates. "In that case even an exchange rate of 1.40 wouldn't be disastrous," said DIW analyst Steinherr.

Germany is a good example of how effectively this can work. Despite the fact that the dollar has lost half of its value against the euro since 2002, exports have not been adversely affected. Indeed, they even increased from �651 billion ($861 billion) to �786 billion ($1.04 triilion). The Germany economy exported more than ever before in October.

Another reason is that the dollar zone is no longer as important for German exports as it was only a few decades ago. Leaving aside exceptions such as the auto industry, other regions of the world have long since become more important to the German economy than the United States, where Germany now sells less than one-tenth of its exports. Germany exports more than 40 percent of its goods and services to other countries within the euro zone, 13 percent to eastern Europe and nine percent to Asia. The turbulence surrounding the dollar has had virtually no effect on German exports to neighboring European countries. Most of the EU's new members have tied their currencies to the euro, and exchange rate risks evaporated for western Europe with the introduction of the euro.

The euro even prevents the kinds of major upheavals in Europe that occurred in the past whenever the dollar fell. When that happened, German businesses and consumers were routinely forced to bear a greater burden of adjustment than the economies of neighboring countries. In the past, if the German mark gained 10 percent in value against the dollar, the French franc or the Italian lira would only gain six or seven percent. As a result, the German mark was overvalued relative to other European currencies, which translated into economic disadvantages for the German economy.

This mechanism was eliminated when the euro was introduced. Now all member states carry the same burden.

The consequences of a declining dollar for the German and European economy will be determined in large part by the way other currencies develop relative to the dollar. "It would be fatal if only the euro were to rise," says DIW analyst Steinherr. "Then it would only be the euro zone that would have to bear the burden of adjustment." But the foreign currency markets suggest a different development, as the dollar is also losing value in relation to other important currencies.

The British pound, for example, rose to new highs last week. Even more importantly, the currencies of east Asian growth regions are also appreciating against the dollar. The Thai Baht, for example, gained about 15 percent against the dollar in 2006, while the South Korean Won gained 10 percent. Even the Chinese Yuan, which slavishly followed the dollar in the past, gained more than three percent. Virtually every economy is bearing part of the burden of adjustment.
The decline in the dollar also has its advantages. For Germany, the greatest advantage is that Germans pay less for oil. The oil price is mainly set in dollars worldwide. If the dollar declines, the same amount of oil costs Europe fewer euros, and the money the Europeans save can be spent on other goods.

A similar dynamic applies to exports from the dollar zone. If the decline in the dollar continues, computers, software licenses and machinery from the United States will become less expensive. Both developments would represent a windfall for companies and people in the euro zone, because the same amount of money would buy more goods.

The perils of a currency crash are not nearly as great as they were in the days of the dollar's absolute dominance 30 or 40 years ago. Globalization has led to the development of a number of growth centers in the world economy which share the burden of turbulence. Gone are the days when an American finance minister could boast: "The dollar is our currency, but it's your problem."

Translated from the German by Christopher Sultan

http://www.spiegel.de/international/...453906,00.html

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

China will proceed with reducing their liability in dollars. the same as any other entity when faced with dumping any stock, currency, or financial instrument. With the Chinese, they will QUIETLY put in an order to their brokerage, Goldman Sachs, and Goldman will begin selling, little by little, US Treasuries on the open market, for Yen, Rubles, Euros, Gold, Silver, or whatever. :rock:

There will be no announcement or fanfare, and the Chinese will remain anonymous.:wazzup_sg

Some analysts think this entire mission, paid for by the US Taxpayer, was not US business, but Goldman Sachs business, and that the particulars of unloading dollars and how much, were determined at this meeting.:beer:

The declining result for the dollar, over the next few months, however, will be very telling indeed.:eek:

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Well here in good ole USA we say FORD stands for;
Found On Road Disabled :eek:

Just my two cents worth to the thread... What the chinese told our deligation in regards to the global chess game...checkmate

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

What struck me about Sloves post was this couple of lines------

"The depreciation of the US dollar and the appreciation of the RMB have reduced China's export competitiveness. Due to a decrease in the import of Chinese-made Christmas gifts to the US, there is a shortage of Christmas gifts on the US market. It is expected that Santa Claus might not have so many gifts to send out this year.

Seems like US are not the only Sheeple. This is a Chinese source? Do they really believe this?

Where would they come up with this type of stuff.

E-A

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

PMs open unchanged & nonplussed. So much for this story. Unless its got a long fuse. G'night.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Gold's up 1.60, come back rodin, come baaaack.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Everyone in China must still be asleep?

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Not that I necessarily believe the story, and no, its not something was was released as a news item from China - it was alleged, and the article said so, and probably as a threat to the US PTB or maybe privately from one ear to another (and the Chinese HAVE come out and said they think its time to move away from the dollar in their media releases over the last month).......

But IF it were true - the Chinese would not just dump a trillion dollars Monday morning - nor did they say (in the story) thats what they would do.........

They would buy euros and PMs over the course of many months.........slowly dumping their dollars - not making it crash overnight - the Chinese are not that dumb!

And IF its true, and they join the other countries lowering or eliminating their use of the dollar - over many months - it would mean, next year we should start to see PM spike up.

So let's discount the POSSIBILITY of there being any truth in this in, say, July, not 9am Monday morning.

Re: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
 

Okay! Okay!

It was just a kinda joke.

I'm with ya.