china to dump 1 trillion in us dollars!

If China are going to get rid of their dollar reserves then it will be over the long term (just like they built them up). If they try to put all of the trillion dollars on the market at once then the price of the dollar would collapse - which would mean that the value of the holdings they are selling would collapse. They would be cutting off their nose to spite their face. Remember - every currency sell needs a buyer.

China and the US are trapped in a mutual embrace, that has been greatly benificial to them both, over the dollar. Neither of them wants to break off that embrace in too much of a hurry.

China will start diversifying it's currency reserves gradually - selling discrete packages of dollars and buying other currencies, such as the Euro. That they are going to do this is pretty well known amongst economists and is hardly breaking news.

I'm pretty skeptical of it.

The short line about M3 data is where I quit reading. It should be a major red flag with neon lights attached to it. The US Federal Reserve has indeed cancelled the publication of M3 data. The problem is, M3 includes far more than printed money. The amount of printed, physical money can still easily be found on the Federal Reserve's FRED2 database.

If that's inaccurate, how much else in the article is?

From Yahoo news:



Source

I would think........that id China dropped 1 trillion in US dollars, the market would start crashing, insed of going up slightly...but what do I know?

The dollar is still holding strong around the 1.30 levels on the Euro/Usd exhange rates, there was a slight dip in favor of the dollar today but not a sell off any kind, and currently we're right around the same place that the forex markets opened up yesterday.

overnight the dollar lost some ground to the Euro and the Cable, Euro/Usd currently trading at 1.3163, depending on the data coming out later this morning, the dollar could lose some more ground if it's negative or go back to the 1.30 levels if the news is positive.

Looks like the FEDERAL RESERVE sold out America again:
www.iht.com...

And now on MSNBC --- THAILAND is dumping their reserves. Here we go.
Gold up, Silver up, 10yr treasury bonds hit 9 year low.

i did find another (more reliable) source that states China is dumping dollar reserves, but not to the tune of 1 trillion:
www.abovetopsecret.com...
still though, it is worying.

Iran is also dumping dollars, at least as currency for their oil:


news.bbc.co.uk...

"CHINESE DOLLAR DUMP STORY WAS DISINFO "



source

Idea to blame China for US dollar crash????

You have got to be kidding me right ? US dis-Info on The Hal Turner Show ? HAHAHAHAH like that will make it into mainstream and everyone will be shocked.

You have to filter most of what you read on the internet and anything with fantastic claims requires fantasic evidence, if this is missing then you can pretty well dismiss it.

well according to our gov't, China isn't manipulating its currency

things that make you go hmmmmm.........

Report: China Currency Not Manipulated

WASHINGTON (AP) -- The Bush administration said Tuesday that China does not meet the technical requirements of a country that is manipulating its currency to gain unfair trade advantages.
The administration did say Tuesday that "more flexibility in China's exchange rate will help it achieve more balanced growth" and promote a number of other outcomes that would be economically beneficial.

This is not good. European Banks issue warning about U.S. dollar:
www.spiegel.de...
www.spiegel.de...

Warning! 3 prong attack! Bonds, stock & real estate! oh, oh!
www.marketoracle.co.uk...
The U.S. dollar has a nine year low against the Thai Baht! a country that just had a military coup! Warning, Danger, danger!

U.S. 4.6 trillion more in debt!
www.worldnetdaily.com...

Iran dumped dollar!
www.breitbart.com...

Bloomberg says gold will now rise to over $1000.00 dollars an ounce in the next 18 months. This isn't a gold bug website.
www.bloomberg.com...

Opec worries over dollar plunge:
www.newsmax.com.../money/archives/st/2006/12/4/92238.cfm&PROMO_CODE=0&s=st

Can we say AMERO. Democracies always vote themselves more money than they have, America should have remained a republic.

The meeting with China wasn't about them dumping assest.

It was a broader, new approach in hopes of improving ties with China.

The first of them being the unusual nature of Paulson's unprecedented "strategic economic dialogue" itself. The new bilateral forum has made the Wall Street veteran Washington's new point man on China. And by all appearances, Paulson is seeking to reframe the relationship in a more comprehensive way—beyond the narrowly defined and often contentious issue of trade.

Here is another interesting snippet from the article:

The fact that Chinese officials seem to greet this approach as natural, rather than suspicious, shows how far their confidence has risen. For much of China's history, the country's leaders have been deeply defensive about change—especially when the suggestion comes from foreign officials. Top officials never want to be perceived bowing to external pressures—especially on sensitive topics such as human rights, trade imbalances or sovereignty- related issues like Taiwan—that might be perceived as allowing outsiders to "meddle'' in Chinese affairs. Yet here, in a city busily primping and rebuilding for the 2008 Olympics, top-level U.S. officials discussed with their counterparts everything from China's health-care schemes to the savings rates in both nations (too low in the United States, too high in China).

Also, it was about more than just the economy, it was to help China set up both a retirement and health care system, as well as improve the environment. Furthermore - it wasn't a finacial "A-Team" - below is a list of a few people who went;

Health and Human Services Secretary Mike Leavitt

Energy Secretary Sam Bodman

EPA Administrator Stephen Johnson

Labor Secretary Elaine Chao

In the meeting, China acknowledged that a large part of the deficit (trade) is that the Chinese people are afraid to spend money, so they save it. Why are they afraid? Well, like I said Health Care and Social Security would be a huge factor.

The value of this synergistic approach was underscored during Friday's press conference, when Chao explained the links between Beijing's dysfunctional pension schemes, its even wobblier health-care system and the fact that Chinese save instead of spend so much of their cash. "Chinese save so much money because they don't have secure retirement or health-care systems." One way to stimulate Chinese demand (and reduce Beijing's overdependence on exports) is for U.S. experts to help China reform its pension and health-care services so that Chinese can feel secure enough to spend. Says Chao, "Chinese would be prompted to consume more, buy more American goods and create more American jobs."

No off the wall sites here, it's a Newsweek article.

Linkage

[edit on 19-12-2006 by crisko]

I see alot of threads about the US dollar losing value and economy crashing. What does this mean to the regular person. i have alot of money saved up in a savings account does that mean that money will me worthless and i wont be able to buy anything. i am not very familiar with this kind of stuff. if something big is going to happen very soon what would be the best way to save my own money.

Originally posted by jaso109
I see alot of threads about the US dollar losing value and economy crashing. What does this mean to the regular person. [] if something big is going to happen very soon what would be the best way to save my own money.

You need to diversify liquid holdings into TANGIBLE ASSETS.

collect and buy scrap semi precious and precious metal aluminum, copper, brass, silver, gold, etc. An economy will come after the fall of the fiat where men will again trade between one another in weighed metals.

keep quantity of grain and dried legumes. This is a fair place to put USD500 - 2000 including quality bulk containers

keep a drum or two of fuel (500)

Lumber, tile, marble, granite, gravel, brick...

LAND

seed, firewood, livestock

TOOLS/weapons

Off grid projects; savonius turbines, passive thermosiphon hot water, wood stove, solar, battery banks, etc.

Do not worry about insulating your money.

Concern yourself with insulating your family through a transition in which money is useless.

Regardless of whether this was false information; China is going to dump their holdings... and they will dump it into TANGIBLE ASSETS; US assets because they're cheap (leveraged).

Meaning, they get the bulk of the: Infrastructure, Weapons, Land, Metals, and scarily enough ... People



Shame you didn't think of it first.

I am,

Sri Oracle

I doubt if the Chinese are going to dump 1 trillion US dollars all at once. However, I do think they as well as many other countries are growing very concerned at the exploding US debt caused by this Administration and Congress. Let's face the facts, in the last 6yrs the Federal debt has grown from 5 trillion to close to 9 trillion dollars! Almost doubling the debt without a corresponding increase in the GDP. To finance this debt the FED has nearly doubled the money supply thus causing the US dollar to devalue nearly 45% against other currencies in six years. So a foreign holder of US debt paper has seen their reserve holdings lose that much purchasing power. Is it a surprise that many countries are now very alarmed and are quietly ( or not so quietly as in the case of Iran ) switching out of US denominated holdings? China will probably do so as well but it needs to proceed cautiously in this direction as a sudden move could send the dollar into freefall hurting itself and everyone else in the process. However, I do think in the next 2 years we are going to see a dollar crisis if this Administration and Congress do not put the reigns on their runaway spending. Will it happen? I'm putting my money into gold and silver.

G.W. and Company has killed the USA in pursuit of their dream of global oil domination, Jeebus better get back soon or people in the USA will find out what Hell-on-earth is like.

BTW - When the economy collapses, if the Government is insolvent does that apply to the Laws as well? Cause I smell a lynchin comin on.

A rapidly devaluing currency has never been in history good for the country, its government, and its people. Remember 1920's Germany? That being said, when the economy collapses as a result of this more monetary controls and restrictions will be enacted as well as the continued removal of constitutional freedoms and liberties. What I see coming ain't pretty. No economy in history that has carried such a high proportion of debt to GDP has ever avoided certain collapse. The American Empire is facing doom thanks to the "idiocy" of GW and Co.

There is nothing "alarming" about our debt - and it is not the highest it has ever been. Be sure to check out the image.

Viewed alternately as a percentage of the GDP, the national debt rose sharply during World War II, reaching about 122% of GDP in 1946. As soon as the conflict ended, the debt began declining, reaching a postwar low of 32.6% of GDP in 1981. The debt then started rising again and peaked at 67.3% of GDP in 1996. It then dropped to 57.4% of GDP by 2001 but then began rising again, reaching 64.3% of GDP by 2005. It should be noted that the debt of United States is on par with the debt of other developed countries, such as Germany and France.

Also - China dose not hold a trillion in US debt.

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD


Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct
Country 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2005 2005 2005
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------

Japan 641.1 641.0 646.4 637.8 635.3 637.9 639.2 637.3 655.6 652.4 669.0 666.8 667.0
China, Mainland 344.9 342.3 339.1 330.3 325.3 322.2 319.1 317.4 317.2 313.9 310.0 303.9 301.7
United Kingdom 2/ 207.5 207.8 200.8 190.3 201.5 175.0 166.8 179.1 162.3 157.2 146.0 135.5 100.3
Oil Exporters 3/ 97.9 104.4 107.2 103.1 101.5 102.6 99.1 98.0 96.2 89.4 78.2 79.3 75.4
Korea 69.0 69.0 66.7 68.4 68.9 68.8 70.9 72.4 72.8 71.2 69.0 68.8 63.7
Taiwan 64.5 65.0 65.6 66.7 67.1 67.5 68.9 68.9 68.9 68.7 68.1 68.3 68.9
Carib Bnkng Ctrs 4/ 56.3 51.5 63.7 69.0 60.4 58.6 61.6 61.9 54.3 65.4 78.6 82.6 75.0
Germany 52.7 52.9 51.9 50.3 48.7 47.2 46.7 46.4 47.9 48.0 49.9 48.6 47.3
Hong Kong 50.6 49.6 50.6 48.9 48.8 48.4 49.4 46.6 44.9 44.6 40.3 42.8 44.0
Canada 49.6 49.7 49.2 42.4 41.3 40.9 36.8 34.7 33.3 29.6 27.8 28.6 26.3
Brazil 46.4 45.0 43.2 31.7 33.4 32.9 30.8 31.4 33.3 30.1 28.7 28.8 27.1
Mexico 40.0 39.9 39.8 45.7 45.7 43.4 41.9 40.1 37.6 36.5 35.0 36.6 34.9
Luxembourg 38.1 37.3 37.0 38.0 37.4 38.5 37.5 36.6 36.2 35.2 35.6 36.6 36.7
Singapore 30.5 33.3 34.0 34.3 34.6 35.7 36.7 33.1 33.5 32.9 33.0 33.4 33.9
France 30.0 21.0 26.9 25.6 29.2 30.7 30.1 34.7 34.9 32.0 30.9 31.3 30.0
Switzerland 29.7 29.8 30.9 31.0 30.6 30.5 31.1 30.9 31.2 30.4 30.8 30.7 32.6
Ireland 21.9 20.8 21.3 19.8 20.0 19.0 17.7 19.6 19.3 21.1 19.7 23.0 22.1
Turkey 21.5 22.9 23.3 21.8 19.1 21.5 21.6 21.0 21.6 18.9 17.4 18.5 15.7
Netherlands 17.6 15.8 14.4 16.0 17.0 15.4 15.4 15.3 15.0 15.7 15.7 16.9 19.1
Sweden 16.9 17.8 18.3 18.3 18.2 18.1 18.0 17.9 17.1 17.4 16.3 17.1 16.7
Belgium 16.5 17.0 17.6 18.3 16.9 17.5 17.4 17.1 17.2 16.7 17.0 15.6 15.4
Thailand 16.1 16.3 16.4 15.8 15.8 15.5 15.6 17.5 17.9 17.0 16.1 16.2 16.2
Israel 15.2 13.1 10.2 10.4 11.4 13.4 13.4 12.3 12.4 12.5 12.5 10.8 11.9
Italy 14.7 14.5 15.0 14.9 15.4 14.2 13.9 13.7 14.3 15.0 15.4 16.5 15.1
Poland 14.4 13.1 13.7 12.8 11.4 13.3 12.3 12.2 12.4 11.3 13.7 13.4 13.2
India 11.4 10.5 12.8 13.4 12.5 12.2 12.3 11.2 10.0 10.3 9.9 11.6 11.3
All Other 149.0 132.2 132.0 126.5 119.7 126.3 138.3 150.5 156.6 152.9 149.5 152.2 142.7
Grand Total 2163.9 2133.4 2148.1 2101.4 2087.1 2067.1 2062.3 2077.9 2073.9 2046.3 2034.4 2034.4 1964.3

EDIT: Spelling



[edit on 25-12-2006 by crisko]

"There is nothing wrong with the debt" - I beg to differ. The 9 trillion dollar figure does not include unfunded liabilities like Social Security or Medicare. Thanks to changes in the way debt is now calculated the total outstanding debt if you add these items is more closer to 40 trillion. With a whole generation of baby bomers to retire starting in 5 yrs who is going to pay for their retirement benefits? Obviously raising taxes is not a popular idea. Somehow I suspect that our estemed and trusted elected officials will take the easy way out, as they have always done- both Democratic and Republican, and just inflate their way out of this mess with more worthless dollars. You may get your social security check by then but try buying a cup of coffee or hamburger. You may not have much left over to buy the booze to wash it down. Yes, the dollar is going down but don't worry my friend be happy- don't worry.

Social Security is not an unfunded liability - every worker in America aside from a few groups are required to pay taxes into it. - it has made money year after year; it's the soon to be (retired) baby boomer's that hurt the system.

In each year since 1982, OASDI tax receipts, interest payments and other income have exceeded benefit payments and other expenditures, most recently (in 2004) by more than $150 billion. [26] As the "baby boomers" move out of the work force and into retirement, however, it is anticipated that expenses will come to exceed Social Security tax revenues if there are no changes in current law concerning taxes, benefits, and the retirement age.

So what happens as they retire?

According to most projections, the Social Security trust fund will begin drawing on its Treasury Notes toward the end of the next decade (around 2018 or 2019), at which time the repayment of these notes will have to be financed from the general fund. At some time thereafter, variously estimated as 2041 (by the Social Security Administration) or 2052 (by the Congressional Budget Office), the Social Security Trust Fund will have exhausted the claim on general revenues that had been built up during the years of surplus. At that point, current Social Security tax receipts would be sufficient to fund 74 or 78% of the promised benefits, according to the two respective projections.

There are two views to this; lets start with the "ZOMG THE SKY IS FALLING" side of the coin.

Now this is a very big problem indeed - how do we fix it? Can we fix it? Yes we can - and it would hurt - a lot. There are multiple solutions - all of thing would leave working class America zinged - they economy would slow but not crash. Basically - we would become more like Europe.

• All federal taxes would have to double immediately and permanently. A household earning $100,000 a year would see its federal taxes double from an average of about $20,000 to $40,000 a year. All state taxes would have to increase 20% immediately and permanently.

• Or, benefits for Social Security, Medicare and government pensions would have to be slashed in half immediately and permanently. Social Security checks would be cut from an average of $1,500 per month for couples to $750. Military pensions would drop from an average of $1,782 per month to $891. Medicare spending would fall from $7,500 to $3,750 annually per senior. The Medicare prescription-drug benefit enacted last year would be canceled.

•Or, a combination of tax hikes and benefit cuts — such as a 50% increase in taxes and a 25% reduction in benefits — would avoid the extremes but still require painful changes that are outside the scope of today's political debate. Savings also could come in the form of price controls on prescription drugs, raising retirement ages and limiting benefits to the affluent.

Now lets look at the views of one optimist:

Economist James Galbraith of the University of Texas in Austin is a rare optimist in this debate. "I'm not at all concerned about Medicare or Social Security," Galbraith says. "Unless the government goes broke, Medicare isn't going to go broke, and the U.S. government isn't going to go broke because it can print money."

Galbraith says the country can handle higher tax rates, as Europeans do, and can save money by cutting spending elsewhere, such as on defense, and by implementing a Canadian-style health care system that uses private doctors and hospitals but has the government set prices and pay the bills.

Your tone is to alarmist, and you make it sound as if Bush created the social security system. He didn't - he is a War Time President - you can bash him for that - but you cannot blame (or give credit) him for Social Security.





[edit on 25-12-2006 by crisko]