When China prepares its « Great Escape » from the dollar-trap for the end of summer

Discussion in 'Money Talk$' started by Martin Luther, Aug 13, 2009.

  1. Martin Luther

    Martin Luther
    Expand Collapse
    New Member

    Joined:
    Dec 26, 2008
    Messages:
    423
    Likes Received:
    0
    #1 Martin Luther, Aug 13, 2009
    Last edited by a moderator: Aug 13, 2009
  2. TomVols

    TomVols
    Expand Collapse
    Administrator
    Administrator

    Joined:
    Oct 30, 2000
    Messages:
    11,170
    Likes Received:
    0
    ML, just because people disagree with you, it doesn't mean they don't understand economics. It could be that you're wrong. It could be that others are wrong. What's strange is I'm virtually square in the Von Mises camp (definitely Friedmanite). Yet you get bent out of shape whenever anyone dares to disagree. Why shoot someone in your own camp? That is, if you ARE Austrian, as you seem to assert. I wonder.

    One major plank has to do with some of the BRIC countries. They have repeatedly eschewed any attempt to jettison the greenback as a standard. Not to say they won't sometime, but no one has a credible plan for what to replace it with since they tend to be rather heavily vested.
     
    #2 TomVols, Aug 13, 2009
    Last edited by a moderator: Aug 13, 2009
  3. Spear

    Spear
    Expand Collapse
    New Member

    Joined:
    Aug 3, 2009
    Messages:
    236
    Likes Received:
    0
    A interesting article, thanks ! (i have no opinion, i take this as information on a possible scenario).
     
  4. billwald

    billwald
    Expand Collapse
    Banned

    Joined:
    Jun 28, 2000
    Messages:
    11,414
    Likes Received:
    0
    All the Chinese can do is quit buying new US paper. The Chinese are stuck with the trillions of bonds they already own. If they trash the dollar their investments will lose in the same proportion as our money.

    If they just quit buying then the interest rate on new issues of govt bonds would be bid up. The people on a fixed income (mostly retired people) would be doubly screwed.

    The Chinese would lose their largest customer country if the dollar crashed. To whom would they sell? It would take years for the world economy to sort itself out - or a new world war. That works every time.
     

Share This Page

Loading...