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

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.

 

A interesting article, thanks ! (i have no opinion, i take this as information on a possible scenario).

 

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.