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Uncle Sam, your banker will see you now

Discussion in 'Political Debate & Discussion' started by poncho, Aug 10, 2007.

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  1. poncho

    poncho Well-Known Member

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    Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds "contributes a great deal to maintaining the position of the dollar as a reserve currency." [China threatens 'nuclear option' of dollar sales, by Ambrose Evans-Pritchard, London Telegraph, August 9, 2007]


    Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, "the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar."


    If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve.



    SOURCE

    The ice just maybe got alittle thinner today eh?
     
    #1 poncho, Aug 10, 2007
  2. Matt Black

    Matt Black Well-Known Member
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    Wall Street and the City of London have read the signs already if the Dow Jones and FTSE are anything to go by....

    We're falling through the ice...
     
    #2 Matt Black, Aug 10, 2007
  3. billwald

    billwald New Member

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    To whom to the Chinese plan to sell their stuff? The Indians and Pakistanis? China will not break its #2 customer.
     
    #3 billwald, Aug 10, 2007
  4. Matt Black

    Matt Black Well-Known Member
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    The Chinese have nothing to crow about right now - ask Mattel's MD.

    Meanwhile, the sub-prime lending chickens are coming home to roost...
     
    #4 Matt Black, Aug 16, 2007
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