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China to crash U.S. dollar?
how likely is this? Most likely to be used for coerce our goverment. But kind of bothersome. should i be worried?
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how likely is this? Most likely to be used for coerce our goverment. But kind of bothersome. should i be worried?
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If the U.S. imposes trade barriers on China, than China will start dumping some of its dollar-holdings, but it would be more like a shot across the bow to force the U.S. to rescind the trade bans.
If the U.S. does nothing, and this is the mostly likely situation, than China will not do anything.
Effectively, China has the U.S. by the balls, but this has been known for quite a few years.Golfing since 67 -
Well, it seems then they have themselves by the balls as well because
1. All their USD wouldn't be worth a damn anymore
2. in the case of the ensuing global crisis, to whom would they sell their products ?"Ceterum censeo Ben esse expellendum."Comment
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We should show China our nuclear option.Click here if you're having trouble sleeping.
"We confess our little faults to persuade people that we have no large ones." - François de La RochefoucauldComment
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QFTOriginally posted by dannubis
Well, it seems then they have themselves by the balls as well because
1. All their USD wouldn't be worth a damn anymore
2. in the case of the ensuing global crisis, to whom would they sell their products ?
All this ''got america by the balls'' talk is BS. In any symbiotic relationship both members are dependent on each other. You might as well talk about how your arm has got your legs by the balls because its so much better(whoops, bad analogy
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if you want to stop terrorism; stop participating in it
''Oh,Commissar,if we could put the potatoes in one pile,they would reach the foot of God''.But,replied the commissar,''This is the Soviet Union.There is no God''.''Thats all right'' said the worker,''There are no potatoes''Comment
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Not at allOriginally posted by dannubis
Well, it seems then they have themselves by the balls as well because
1. All their USD wouldn't be worth a damn anymore
2. in the case of the ensuing global crisis, to whom would they sell their products ?
China would sell of the reserves to buy other currencies and because the Yuan is peg to the dollar, the Yuan goes down relative to other currencies making Chinese goods all the more cheaper on the world market, or the Chinese could simply shift the dollar peg.
And they would sell to the rest of the world, like the EU, other Asian nations and to their own domestic market. They would also sell goods to middle men in other countries who would relabel the goods before shipping to the U.S.
Meanwhile, the U.S. would be neutered and forced to pay even more money for basic things like oil.
But this won't happen because the folks in Washington know the U.S. is economically powerless when it comes to China.Golfing since 67Comment
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And what do you think the sellers of the other currencies will say when China comes to them with a bunch of dollars? "Oh, hey, yeah, I'll buy your dollars at a high value even though I knowit's going to crash soon"?Originally posted by Tingkai
China would sell of the reserves to buy other currenciesTHEY!!111 OMG WTF LOL LET DA NOMADS AND TEH S3D3NTARY PEOPLA BOTH MAEK BITER AXP3REINCES
AND TEH GRAAT SINS OF THERE [DOCTRINAL] INOVATIONS BQU3ATH3D SMAL
AND!!1!11!!! LOL JUST IN CAES A DISPUTANT CALS U 2 DISPUT3 ABOUT THEYRE CLAMES
DO NOT THAN DISPUT3 ON THEM 3XCAPT BY WAY OF AN 3XTARNAL DISPUTA!!!!11!! WTFComment
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Well obviously, the price for euros, for example,would go up, but China would still be able to unload the US dollars, but maybe at a rate of 2 euros to the dollar.Originally posted by LordShiva
And what do you think the sellers of the other currencies will say when China comes to them with a bunch of dollars? "Oh, hey, yeah, I'll buy your dollars at a high value even though I knowit's going to crash soon"?
When stock markets crash, there are always buyers as long as the seller is willing to ditch the stock.Golfing since 67Comment
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The loss would be far greater for China in terms of % of GDP.
Besides, Chinese dollar holdings aren't hugely significant, given the number of dollars in circulation. China is overestimating (surprise!) its power to hurt the US economy.THEY!!111 OMG WTF LOL LET DA NOMADS AND TEH S3D3NTARY PEOPLA BOTH MAEK BITER AXP3REINCES
AND TEH GRAAT SINS OF THERE [DOCTRINAL] INOVATIONS BQU3ATH3D SMAL
AND!!1!11!!! LOL JUST IN CAES A DISPUTANT CALS U 2 DISPUT3 ABOUT THEYRE CLAMES
DO NOT THAN DISPUT3 ON THEM 3XCAPT BY WAY OF AN 3XTARNAL DISPUTA!!!!11!! WTFComment
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The vast bulk of what the US imports is not basic stuff, its largely stuff with a relatively elastic demand. A rapid fall in the value of the dollar would bankrupt exporters to the US around the world, even without a depression in the US. A fortiori with such a depression.Originally posted by Tingkai
Meanwhile, the U.S. would be neutered and forced to pay even more money for basic things like oil."A person cannot approach the divine by reaching beyond the human. To become human, is what this individual person, has been created for.” Martin BuberComment
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except with the US in recession, and the dollar collapsing, the market wouldnt be there, whatever the label is.Originally posted by Tingkai
countries who would relabel the goods before shipping to the U.S.
also the euro markets will be contracting, as the US problems impact Europe."A person cannot approach the divine by reaching beyond the human. To become human, is what this individual person, has been created for.” Martin BuberComment
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Thats the fantasy isnt it?Originally posted by Tingkai
Meanwhile, the U.S. would be neutered"A person cannot approach the divine by reaching beyond the human. To become human, is what this individual person, has been created for.” Martin BuberComment
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net net = IF china could impose a recession on the US, theyd also be imposing one on their own economy.
The US polity can clearly survive serious recessions, and has done so regularly over the last 60 years.
Its not at all clear that the Chinese regime could survive a severe recession."A person cannot approach the divine by reaching beyond the human. To become human, is what this individual person, has been created for.” Martin BuberComment
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It's the economic nuclear option. If Washington fires the first economic nuke, China fires back. No doubt, everyone gets hurt.
But the days when the U.S. could impose economic penalties on China without getting significantly burned are long gone, and that's the big difference.
The U.S. has no economic influence over China because if the U.S. tries to flex its muscle, China just squeezes very hard.
So the U.S. is powerless. American politicians will talk tough at home, but they won't do anything because they know it would lead to an economic nuclear winter.
The U.S. is indeed neutered.Golfing since 67Comment
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Debatable, but definitely the cost of oil would shoot through the roof causing an economic crisis in the U.S. just like in the seventies.Originally posted by lord of the mark
The vast bulk of what the US imports is not basic stuff, its largely stuff with a relatively elastic demand.Golfing since 67Comment
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