I can't take credit for this thread, as it is just a copy and paste from another website. I thought it was a great post though, and wanted to share it with you guys because I feel like it is important. China has spent many years actively buying US Dollars - at a massive rate. Currently they have around $800 billion , and this is set to rise to $1,000 billion this year. The main concern is, if they stop , then it could place alot of pressure on the dollar , and with the state of economy it could potentially break it; dumping the lot could start a downward spiral. There are calls by ecomomists to stop financing US borrowing and invest elsewhere. <quote> \t<hr color="#d0d0d0" size="1" width="100%"> \toriginal news source: http://www.msnbc.msn.com/id/10736596/ WASHINGTON/SHANGHAI - China indicated on Thursday it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets. Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback. In a brief statement on its website, the government's foreign exchange regulator said one of its targets for 2006 was to "improve the operation and management of foreign exchange reserves and to actively explore more effective ways to utilise reserve assets". \t Please visit the link provided for the complete story. </quote> \t China has been actively buying United States bonds and debt for the past few years at the rate of billions of dollars per month. This has held up the exchange rate of the US dollar. Without this the US dollar would have been in a free fall devaluation due to the enormous trade gap now set to reach close to $700 billion. It is still in the best interest of the Chinese to keep the dollar exchange rate high due to the fact that a dollar that is worth more allows the US to purchase larger quantities of products from Chinese manufacturers. The more we buy with a stonger currency the more cash the chinese government gets. The chinese government also is removing the investment qouta from Chinese companies allowing them to aquire foreign commodities and assets. The Chinese government also has close to the equivelant of $2 trillion in cash reserves. What does all of this mean? If the Chinese stop purchasing large ammounts of US bonds this will cause the dollar to devalue. This will cause a huge increase into the cost of importing goods. As our good Canadians can attest to buying something in the US and having it shipped to them. This will in turn cause a huge increase in inflation since nearly all products we buy today are imports. Without domestic suppliers we are forced to buy imports. By removing the investment quota the Chinese government will now allow Chinese companies to purchase assets outside of China. Chinese companies with billions in cash reserves can easily buy whats left of US manufacturing allowing for Chinese owned companies operating in the US. Better hope you have that hybrid car. The policy shift from purchasing US debt to commodities signals that the Chinese are ready to purchase vast ammounts of oil to fuel the growing economy of China. A massive purchase of oil will cause a huge increase in the price of oil as the supply shrinks. Having a vast ammount of oil reserves and a huge increase in price will only add to the Chinese bank. A mass influx of Chinese cash reserves coupled with a dramatic decrease in the value of the dollar can lead to a situation where the Chinese could in effect purchase the United States. China has the rest of the world by its balls and is beginning to squeeze. Or they may just continue to buy US debt and things will be peachy for a little while longer.
I just saw the date on that article, it's almost a year old. Hopefully that means we have nothing to worry about?
Maybe this is true, I heard that the current FED chairman went to China because the US was in trouble and was asking China to help the US so the US don't collapse too fast. So they made a deal to let China dump US dollars, that helps China, and that help the globalists bring the AMERO and the north american union. If it's true, IT'S NORMAL that the main stream medias don't talk about it, it would collapse the entire economy tomorrow morning at the first minutes of the opening of the Dow Jones. So if they don't want to crash it, don't talk about it. What does China have to gain in attacking the US dollar?