Meltdown of U.S. Dollar Underway as China Dumps the Currency

Meltdown of U.S. Dollar Underway as China Dumps the Currency

www.naturalnews.com

Comments by China that it intends to move away from its reliance on the dollar triggered a sharp drop in the Dow Jones Industrial Average and heightened worldwide fears about the U.S. currency's stability. Chinese Central Bank Vice Director Xiu Jian said that his country is planning to shift much of its $1.4 trillion national currency reserve from dollars to more stable currencies, such as the euro or Canadian dollar. After these comments, the dollar fell to record lows relative to other currencies -- the lowest ever against the euro, the lowest in a generation against the British pound, and the lowest in 57 years against the Canadian dollar.

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More cheery news about the economy. If the rest of the year goes as well as the first 4.5 months, it looks like Bush is going to go out with a bang.

The final quote from Sarkozy is interesting.

"The dollar cannot remain 'someone else's problem,' " Sarkozy said. "If we are not careful, monetary disarray could morph into economic war. We would all be its victims."

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(visit the link for the full news article)

[edit on 15-4-2008 by Karlhungis]

What does this mean?? Isn't China one of a couple countries that are the ONLY thing(s) left keeping our currency from being -CRASHED-???

If this article is true, could that mean the END? I mean.. it's needed a re haul or whatever. But what more needs to happen at this point, before something drastic will happen??

reply to post by LostNemesis


I was thinking the same thing. My (albeit limited) understanding was that China and Saudi Arabia were pretty much the last 2 countries keeping us afloat.

I don't know what the end result of this mess will be. It doesn't seem like it will be good for any of us though.

reply to post by LostNemesis


That means that China and the States are actually allies in economy and monetary issues. That means the world really need China and the State to coorporate to solve the "problems" and especially at this time, that the State need China's help to stablize the economy.

So, please talk and think more about doing business, not boycott the Olympics, not boycotting Chinese products.

Business and economy. it is that simple.

reply to post by LostNemesis


That means that China and the States are actually allies in economy and monetary issues. That means the world really needs China and the State to coorporate to solve the "problems" and especially at this time, that the State need China's help to stablize the economy.

So, please talk and think more about doing business, not boycott the Olympics, not boycotting Chinese products.

Business and economy. it is that simple.

Forgive me, but isnt this very significant?
Wont this effectivley bottom the dollar and cause nations to really turn up some pressure?

Originally posted by Karlhungis

www.naturalnews.com

...

Chinese Central Bank Vice Director Xiu Jian said that his country is planning to shift much of its $1.4 trillion national currency reserve from dollars to more stable currencies, such as the euro or Canadian dollar.

(visit the link for the full news article)

the situation is bad for the USD, but not yet dire..


? why do i say that ? --- Because, it was only the Vice Director
of their central bank who pronounced the warning.

also, at the end of the article in the OP, the French President called for the Bush administration to support the USD ---
which is not in the plans of Fed Chairman Ben Bernanke, who is intent on inflating the USD by way of lowering the intrest rates...
making the USD even less attractive to the world wide financial community

reply to post by Agit8dChop


Yes, it seems to be very significant. I don't know what pressure other nations would be able to apply though. It seems that we are now in free fall mode. I am curious what could be done at this point to save the dollar. I am also curious about what the actual tangible effect will be if it can't be saved.

The largest trader to the US is not China, it is Canada. 22.2% of US exports ship to Canada, followed by Mexico at 12.9%. Imports are slightly different, with Canada still in the lead with 16%, followed closely by China at 15.9%.
Sauce

If a decision of this scale is going to be made, they are unlikely to adopt the Canadian dollar as it is too closely linked to the US, so the Euro would be the best option. However, I severely doubt the validity of this news. Why would the Chinese government make such a statement knowing that it would cause a crisis for the dollar? This is not in their interest as they still have the largest reserves of the currency on earth, which I'm sure they don't want see devalued by their own actions.

reply to post by St Udio


Does Bernake have any other tricks than just lowering rates and pumping in money? That obviously isn't working. I don't have any faith that the goons in power could save us if they wanted to. Sadly though, I get the impression that they don't want to.

reply to post by The_Modulus


I think the issue isn't a matter of exports and imports, it is the fact that they hold all of our debt. I could be wrong though.

reply to post by Karlhungis


What I meant to say was in response to people claiming the close economic relations between China and the US, and that they're not as close as between the US and Canada, and that if China was to ditch the dollar they are unlikely to adopt the Canadian coin.

I think that not only does China hold debt against the US but also holds massive reserves of the currency, just in case, reserves they would not devalue unnecessarily by such statements.

reply to post by The_Modulus

Originally posted by Agit8dChop
Forgive me, but isnt this very significant?

Agreed, massively so, it is kind of what we have all been waiting for. Once the house of cards starts to fall there will be no stopping it till the dust settles. In that time frame, the political map of the world could well have changed forever.

Oh NO! if the USD devalues how are the Americans going to buy their hi-fi systems, designer cloths and big cars... you know the stuff they really need...

deny ignorance = deny materialism...

but seriously a down turn in the USD will mean exports will become more attractive and jobs should increase... right?

reply to post by purplemonkey


There is something ironic to me about someone saying "deny materialism", by typing it on a computer.

I would think there would be a better chance for an increase in jobs due to the drop in the dollar if the rest of the world was doing great, but that isn't the case. Everyone is suffering right now. I don't see this generating jobs.

reply to post by Karlhungis


You are partially right. The huge problem is the inflation associated with this weak dollar policy. A disaster to the lower-incomers.

reply to post by The_Modulus


Something wierd. I typed a whole paragraph and it disappeared.

Canada and Mexico have been incorporated into the economy of USA, by the NAFTA. You can well take them as a part of usa'S economy.

China is the largest outside NAFTA and the only one with the leverage now.

Originally posted by Karlhungis
reply to post by purplemonkey

 

There is something ironic to me about someone saying "deny materialism", by typing it on a computer.

well no one is perfect

Originally posted by Karlhungis
reply to post by purplemonkey

 

I would think there would be a better chance for an increase in jobs due to the drop in the dollar if the rest of the world was doing great, but that isn't the case. Everyone is suffering right now. I don't see this generating jobs.

I'm doing great!