China threatens "nuclear option" of dollar sales

Discussion in 'Economy' started by BaronVonBigmeat, Aug 7, 2007.

  1. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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



    It sounds like China now has almost as much control over the dollar as the federal reserve. If they dump their dollars, everything you buy from China would become more expensive. Likewise, everything we still manufacture would become cheaper to them. I don't think they will do it because it would be bad news for their export-dependent economy, but still, the fact that they are talking about it openly (while we openly discuss possible sanctions) makes me nervous. In the 1920's we had a credit bubble, then the Smoot-Hawley trade sanctions, then the depression. Now we've got a credit bubble, and almost as if on cue, politicians talking about big trade sanctions.
     
  2. Ruby
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    Ruby Member

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    I agree that its doubtful China would do it like that, they would also get hurt.

    The bigger fear is that China seems to be better at thinking long term and America seems to think more short term. I suspect China will keep reducing their reserves while they have value and building reserves in more stable currency and the Euro is looking like the next real stable currency, so they have options as long as they are willing to do it over a long term and not do anything too quickly which is how they do seem to be proceeding thusfar. They also need to shift away from relying so much on the american markets but there also appear to be rising markets elsewhere so they have more options there as well.

    America just has to have its own plan to deal with shifts in the global economy and the shifts of power that are occuring. The shifts and changes are inevitable, we just need a good plan so that we adapt well. We have gotten ourselves into such a bad spot now with war and so much debt, it really is gonna hurt our ability to adapt in painless way.
     
  3. Bullypulpit
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    Bullypulpit Senior Member

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    Given that China owns a large chunk of US debt, our economy will tank if they dump it. If that's not a threat to national security, what is? Just another episode of "Thank You President Bush!".
     
  4. JeffWartman
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    JeffWartman Senior Member

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    It's both parties fault, not just a Republican vs. Democrat thing. Clinton was very close to China, and we need to understand that the Democrats have as much to do with this as the Republicans.
     
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  5. RetiredGySgt
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    RetiredGySgt Platinum Member

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    No No. Forget about Clinton taking bribes from China and OPENING markets to them, selling them classified material, taking huge payments for his campaign, this is all about Bush, WHY just think if you research this you will find that China bought all the assets it has in the US since January 2001. That all the trade policies with China were passed since January 2001.

    Come on this is all Bush's fault, no intelligent person with an ability to read, write and hear could ever belief anything else. No partisan bullshit here at all.
     
  6. Ruby
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    Ruby Member

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    I would agree that this problem is the fault of both parties but it is Bush who has taken this problem to new heights. We are borrowing at a pace faster than the speed of light due to a war that the Bush administration started. Think of ALL the money and debt we wouldnt have if we had not started the war in Iraq, think of all the money that we have yet to borrow are going to spend in the future on this war. Bush exacerbated this problem to a very high degree.
     
  7. RetiredGySgt
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    RetiredGySgt Platinum Member

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    BULLSHIT, plain and simple.
     
  8. Diuretic
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    Diuretic Permanently confused

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    BULLSHIT, plain and simple :rofl:
     
  9. JeffWartman
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    JeffWartman Senior Member

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    Not if you understand economics.

    If Bush didn't turn a surplus into a deficit the problem wouldn't be half as bad.
     
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  10. JeffWartman
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    JeffWartman Senior Member

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    This is a very important issue.

    China has about the same power to effect our currency as our own government does, thanks partly to the policies of President Bush.
     

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