China Will Dump The Dollar In 2013

China Will Dump The Dollar In 2013

Posted in the China Forum

First Prev
of 3
Next Last
MASS HYSTERIA

Brooklyn, NY

#1 Aug 16, 2012
There has been a lot of well-meaning talk about the “threat” of China dumping the dollar, with precious little discussion of potential mechanisms.

A ZeroHedge piece that just came out got me thinking that China is actually well underway on its path to explicitly driving the stake into the heart of the dollar once and for all (incidentially, this makes a nice follow-on to my recent article about China’s ability to “dump” the dollar based on hard asset holdings). It is clear now they really are going down a well-defined path here, that shows it is only a matter of time until we arrive at wholesale regime change for the dollar-dominated international trade system.

The main insight in the article is that China is taking new steps to provide for settlement of trade in Yuan instead of dollars:

The Chinese central bank surprised with a spectacular announcement: The would-be superpower wants to handle their entire future foreign trade in yuan, not in dollars. Beijing shakes America’s claim to represent the key currency – with serious consequences for the U.S..
…

Previously, China also announced that bilateral trades with Russia and Malaysia will begin to be conducted with the yuan and the ruble and ringgit, respectively.

Other moves on the part of China to internationalize its currency include allowing foreign companies to issue yuan-denominated bonds and relaxing rules for foreign financial institutions to access the yuan.

Over the past two years, they had begun doing this at first with select trading partners. Then, in the last few months they began establishing the general ability to do this via the normal banking system (as in, allowing for holding Yuan in banks outside of China).

Those who are saying that China is “stuck” with the dollar are now apparently more sure of this than China is. If China is “stuck”, it is certainly not acting like it. And heaven forbid they create exactly the outcome they want to bring about by resolutely taking those first few steps of a “journey of 1000 miles”, nay-sayers be damned.

When you think about it, it makes little sense that everyone (especially the Chinese) should by default hold dollars, when China and not the US is the “company store” the world goes to for most of its goods. Basically, the US has (till now) had the geopolitical influence to demand its own worthless IOUs be accepted by that store. But now the vendor realizes that if he decides not to accept them, the customer will not have anywhere else to go, so it is the vendor (i.e., the one providing the real stuff) that can demand the terms.
THE WEST IS CRUMBLING

Brooklyn, NY

#2 Aug 16, 2012
When China dumps the dollar, the Arab States and Europe will follow suit. The yuan will become the new currency and oil will have to be paid in yuan.

Massive 68% Unemployment will hit America along with hyperinflation and $45 dollar loaves of bread, looting, rioting, mayhem. We will witness the end of America as we know it.

Better get your passports and visas ready. It's not going to be a pretty sight.
RayH

Shenzhen, China

#3 Aug 16, 2012
THE WEST IS CRUMBLING wrote:
When China dumps the dollar, the Arab States and Europe will follow suit. The yuan will become the new currency and oil will have to be paid in yuan.
Massive 68% Unemployment will hit America along with hyperinflation and $45 dollar loaves of bread, looting, rioting, mayhem. We will witness the end of America as we know it.
Better get your passports and visas ready. It's not going to be a pretty sight.
No worries, you can always go to the neighborhood gun shop to stock up on guns.
OVERTHROW THE CCP PIGS

Canada

#5 Aug 16, 2012
China is a "banana republic" that uses play money pegged to the dollar.

Soon, they will just use worthless play money, it seems!

Pretty BIZARRE to claim the Yuan, NOT CONVERTIBLE and PEGGED TO THE DOLLAR is going to be the "new reserve currency"!!!! HOW CAN THAT BE IF IT HAS NO VALUE EXCEPT IN RELATION TO THE GREENBACK????

TOTALLY ILLOGICAL!

Such WEIRD DELUSIONS of GRANDEUR these CCP fools have!

HA HA HA HA HA HA HA HA HA!
RESISTANCE IS FUTILE

Mackenzie, Canada

#6 Aug 16, 2012
A economist is now saying China is not a export dependent economy...

if China is not export dependent anymore... then there is no reason to prop up the dollar

and even more reason...to allow the Yuan to appreciate giving the Chinese consumer more buying power

good and bad news for Americans... as it will mean more jobs... as Chinese buy american products

but then it will be blue collar jobs... as we are already seeing a rise in blue collar work in the USA...
I can read

Edinburgh, UK

#7 Aug 16, 2012
What a moronic plan.

-China dumps the dollar, deliberately crashing its value.

- The US reacts to this attack on her economy and defaults on Chinese debt.

-China has their economy crash too

-Europe helps the US recover

-China is taken over by Japan

Actually, then China would get democracy and human rights. Maybe that plan isn't moronic at all.
RayH

Shenzhen, China

#8 Aug 16, 2012
I can read wrote:
What a moronic plan.
-China dumps the dollar, deliberately crashing its value.
- The US reacts to this attack on her economy and defaults on Chinese debt.
-China has their economy crash too
-Europe helps the US recover
-China is taken over by Japan
Actually, then China would get democracy and human rights. Maybe that plan isn't moronic at all.
China gets your "democracy and human rights" when its economy is crashed and its people live under the boots of Jap invaders again? You anti-China nut jobs are morons.

Now I know why China's been rising rapidly for the past 30 years.
I can read

Edinburgh, UK

#9 Aug 16, 2012
RayH wrote:
<quoted text>
China gets your "democracy and human rights" when its economy is crashed and its people live under the boots of Jap invaders again? You anti-China nut jobs are morons.
Now I know why China's been rising rapidly for the past 30 years.
WEll they certainly aren't getting democracy and human rights from the dictators currently in charge, are they?

Japan might have raped half your country 70 years ago but now they are undeniably your moral superiors.
RayH

Guangzhou, China

#10 Aug 16, 2012
I can read wrote:
<quoted text>
WEll they certainly aren't getting democracy and human rights from the dictators currently in charge, are they?
Japan might have raped half your country 70 years ago but now they are undeniably your moral superiors.
Japs are moral superiors? You had better explain that to their W.W.II British POWS living in your merry old England.
AZN
#11 Aug 16, 2012
I can read wrote:
<quoted text>
WEll they certainly aren't getting democracy and human rights from the dictators currently in charge, are they?
Japan might have raped half your country 70 years ago but now they are undeniably your moral superiors.
The Japs are morally superior.
Because they fulfill the west's definition of morality.
I.e. become the lapdog of the west.
AZN
#12 Aug 16, 2012
I can read wrote:
<quoted text>
WEll they certainly aren't getting democracy and human rights from the dictators currently in charge, are they?
Japan might have raped half your country 70 years ago but now they are undeniably your moral superiors.
The Japs are morally superior.
Because they fulfill the west's definition of morality.
Which is being the lapdog of the west.
AZN
#13 Aug 16, 2012
The Japs are morally superior.
Because they fulfill the west's definition of morality.
Which is being the lapdog of the west.

And I am superior to all the Chinkys, because I am Black!

Down with China!!!!
uIDIOTRACESMAKEW ORLDPEACE

United States

#14 Aug 17, 2012
I can read wrote:
What a moronic plan.
-China dumps the dollar, deliberately crashing its value.
- The US reacts to this attack on her economy and defaults on Chinese debt.
-China has their economy crash too
-Europe helps the US recover
-China is taken over by Japan
Actually, then China would get democracy and human rights. Maybe that plan isn't moronic at all.
u forgot other nations are also beginning to see US macroeconomic wars on global scale is bring other nations economies down may really drop USD go for the Euro or yaun.
THE WEST IS DYING

Brooklyn, NY

#15 Aug 17, 2012
Yup it won't be long now.

And it wont be pretty either.
RESISTANCE IS FUTILE

Mackenzie, Canada

#16 Aug 17, 2012
I can read wrote:
What a moronic plan.
-China dumps the dollar, deliberately crashing its value.
- The US reacts to this attack on her economy and defaults on Chinese debt.
-China has their economy crash too
-Europe helps the US recover
-China is taken over by Japan
Actually, then China would get democracy and human rights. Maybe that plan isn't moronic at all.
dummy...

China has only 1 trillion in US debt

its people who have around 17 trillion in wealth... should see that wealth go up in value... as they unpeg the Yuan to the dollar and dump the US dollar holdings

plus retard that debt you want to default on 10 trillion of it is directly or indirectly owned by the American people...

plus if the USA were to default... China could hold up the USA from issuing anymore international debt until they as a creditor are satisfied with the restructuring of their initial debt...

creditors were able to hold up Argentina for 8 years unhappy with their restructuring...
RESISTANCE IS FUTILE

Mackenzie, Canada

#17 Aug 17, 2012
Eric J. Weiner

Financial journalist and author
Posted: October 6, 2010 02:27 PM

Can Anyone Talk to China Anymore? Probably Not

Can anyone talk to China anymore?

It's an increasingly important question for the United States and the rest of the world to ponder as the emerging giant asserts itself globally.

The House voted overwhelmingly last week to give President Obama sweeping authority to impose steep tariffs on Chinese imports. The move was aimed at retaliating against Beijing's monetary policy, which essentially keeps the value of the nation's currency artificially low so Chinese manufacturers can dump cheap exports on developed economies.

Whether the Senate will go along with the plan is still open to debate. But it's probably more pertinent to ask exactly what China would do if the U.S. actually did slap harsh tariffs on its goods? Based on China's recent behavior, any rash moves along those lines could trigger a deeply bitter reaction and possibly an outright trade war that, frighteningly, the U.S. would not win.

Consider that before the president's appearance in front of the U.N. General Assembly in September he had a two-hour meeting with Chinese Premier Wen Jiabao, in which he basically demanded that China stop manipulating its currency. China's response? Ho-hum. Precisely how much money do you owe us again?

Meanwhile, on the other side of the globe, Japanese manufacturing companies suddenly discovered that they'd been cut off from the rare earth minerals that they require to make high-tech products such as computers and cell phones as well as energy-efficient items like wind turbines and hybrid cars. What happened to Japan's rare earth imports? According to the Japanese government, China, which controls 93% of the global rare earth supply, decided to block shipments to Japan to score points in a diplomatic dispute. A few weeks earlier a Chinese fishing boat in Japanese waters crashed into a couple of Japanese coast guard ships. Japan seized the boat and arrested the captain. In response, China promptly detained four Japanese employees of Fujita Corp. on suspicion of filming a restricted military area in northern China.

So Japan proposed an exchange: the fishing boat captain in return for the four arrested Japanese citizens. But Japanese government officials say China balked and then, in an awesome display of economic power, simply cut off its rare earth shipments to Japan. The Chinese government denied the accusations, but true or not, Japan suddenly found itself in an unwanted trade war with its biggest trading partner. Through the first half of this year alone, China had bought $20 billion of Japanese government bonds and Chinese companies had invested roughly $120 million in Japanese businesses. This provided a needed boost to Japan's sagging economy.

http://www.huffingtonpost.com/eric-j-weiner/c...
RESISTANCE IS FUTILE

Mackenzie, Canada

#18 Aug 17, 2012
Sensing the coming heat, the Japanese government acquiesced and freed the fishing boat captain on Sept. 24 with no strings attached. Only then did Beijing's rare earth minerals showdown ease. And last week, China released three of the Fujita employees it was holding. However, one Japanese citizen still remains in a Chinese prison cell, a bargaining chip for a later negotiation.

Why would China so brazenly challenge the world's economic powers like this? Because the country's leaders know what our leaders are only beginning to understand --

that China would probably win a global trade war.

In March 2009, the Pentagon for the first time held a series of economic war games exercises.

The soldiers were Wall Street traders and executives, economists and academics.

The weapons were stocks, bonds and currencies. The participants were divided into teams: the U.S., China, Russia, Japan, the European Union and so on.

Then the teams were presented with different scenarios -- North Korea is imploding, a major global economy is melting down -- and told to do what was in their best interests.

Our intelligence experts watched as the economic conflicts played out.

What the exercises showed was that the U.S. consistently lost to China in economic warfare.

Part of the reason was that the U.S. could be easily distracted by expensive side conflicts that sapped our economic strength.

But the more important reason was that China could inflict real pain on the U.S. without feeling it at home.

For instance, by simply moving the maturities of some of its $850 billion in Treasury holdings from 90 days to 60 days, it could cause chaos in the U.S. stock markets.

Or China could sell just a trickle of its U.S. financial assets and signal that it didn't have confidence in the U.S. economy, setting off a panic here.

The overall lesson from the exercise was that, for all of our saber-rattling, in our weakened economic state we have to be careful about poking this dragon.

And what's more, everyone involved knows it.

So returning to the original question: Can anyone talk to China anymore?

Sadly, for the time being it appears the answer is no.

http://www.huffingtonpost.com/eric-j-weiner/c...
uIDIOTRACESMAKEW ORLDPEACE

United States

#19 Aug 17, 2012
RESISTANCE IS FUTILE wrote:
Eric J. Weiner
Financial journalist and author
Posted: October 6, 2010 02:27 PM
Can Anyone Talk to China Anymore? Probably Not
Can anyone talk to China anymore?
It's an increasingly important question for the United States and the rest of the world to ponder as the emerging giant asserts itself globally.
The House voted overwhelmingly last week to give President Obama sweeping authority to impose steep tariffs on Chinese imports. The move was aimed at retaliating against Beijing's monetary policy, which essentially keeps the value of the nation's currency artificially low so Chinese manufacturers can dump cheap exports on developed economies.
Whether the Senate will go along with the plan is still open to debate. But it's probably more pertinent to ask exactly what China would do if the U.S. actually did slap harsh tariffs on its goods? Based on China's recent behavior, any rash moves along those lines could trigger a deeply bitter reaction and possibly an outright trade war that, frighteningly, the U.S. would not win.
Consider that before the president's appearance in front of the U.N. General Assembly in September he had a two-hour meeting with Chinese Premier Wen Jiabao, in which he basically demanded that China stop manipulating its currency. China's response? Ho-hum. Precisely how much money do you owe us again?
Meanwhile, on the other side of the globe, Japanese manufacturing companies suddenly discovered that they'd been cut off from the rare earth minerals that they require to make high-tech products such as computers and cell phones as well as energy-efficient items like wind turbines and hybrid cars. What happened to Japan's rare earth imports? According to the Japanese government, China, which controls 93% of the global rare earth supply, decided to block shipments to Japan to score points in a diplomatic dispute. A few weeks earlier a Chinese fishing boat in Japanese waters crashed into a couple of Japanese coast guard ships. Japan seized the boat and arrested the captain. In response, China promptly detained four Japanese employees of Fujita Corp. on suspicion of filming a restricted military area in northern China.
So Japan proposed an exchange: the fishing boat captain in return for the four arrested Japanese citizens. But Japanese government officials say China balked and then, in an awesome display of economic power, simply cut off its rare earth shipments to Japan. The Chinese government denied the accusations, but true or not, Japan suddenly found itself in an unwanted trade war with its biggest trading partner. Through the first half of this year alone, China had bought $20 billion of Japanese government bonds and Chinese companies had invested roughly $120 million in Japanese businesses. This provided a needed boost to Japan's sagging economy.
http://www.huffingtonpost.com/eric-j-weiner/c...
Japanes also complained about US macroeconomic warefare is doing to its economy and few intelligent Americans also talking on US leaders insidious war is also ruining the Americans economic/financial well being.
OVERTHROW THE CCP PIGS

Edison, NJ

#20 Aug 17, 2012
I love Grouch. Tell him to marry me
taiwan_numerouno

Hoffman Estates, IL

#21 Oct 25, 2012
I just got back from China. They are "burning down the house" sort of speak in creating an environmental diaster in order to provide inexpensive exports for America and the rest of the world. They did start to clean up Beijing for the 2010 Olympics, but their air quality is so bad that it is killing their citizens with lung and cardiovascular diseases...I couldn't even handle one week in Beijing.
I can read wrote:
What a moronic plan.
-China dumps the dollar, deliberately crashing its value.
- The US reacts to this attack on her economy and defaults on Chinese debt.
-China has their economy crash too
-Europe helps the US recover
-China is taken over by Japan
Actually, then China would get democracy and human rights. Maybe that plan isn't moronic at all.

Tell me when this thread is updated:

Subscribe Now Add to my Tracker
First Prev
of 3
Next Last

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

China Discussions

Title Updated Last By Comments
News Israeli Blockade Dims Hopes For Gazans To Trave... 20 hr Stephany McDowell 1
a labor movement in china! now! (Jun '14) Tue Tony 49
News China needs to urgently transform its economy: ... Mon Stephany McDowell 1
News As Obama heads to Laos, signs of a tilt away fr... Mon SirPrize 1
Muslims needed in Santa Cruz ca.-nazi junkie sc... Sun Mr insurance dedu... 1
Stereotypes of Chinese people (May '14) Aug 28 Punta 44
Are Chinese Barbaric? (Nov '07) Aug 24 Jynxie 693
More from around the web