China threatens 'nuclear option' of dollar sales

[ChamberedRound]

Originally Posted by TheHighChild

The Fed Gov isn't printing the money, the Federal Reserve is.

Fair enough, thanks for the correction.

The point I was trying to make is that the Federal Reserve is managed by the Board of Governors, a federal agency, whose members are appointed by the President and confirmed by the Senate. Hence, they answer to the Federal Govt. via the Executive Branch.

[brewguy]

Originally Posted by RoyJackson

Anyone who believes China wouldn't do this is a fool. Short term (relatively speaking) losses vs. long term gains is in China's interest. Long term gain, in this case, is geo-political power.

The fact that China, a country who hates us and has or wants nukes. Has the ability to bring our economy to a screaching halt should have everyone worried.

We have been the only real super power for decades. I think China would consider it a possibility to make us crack.

[KeithPA]

Originally Posted by RoyJackson

Anyone who believes China wouldn't do this is a fool. Short term (relatively speaking) losses vs. long term gains is in China's interest. Long term gain, in this case, is geo-political power.

That exactly what I was going to write last night, but was too lazy. They will take a hit, but not as large as what will happen to us. Their way of thinking is "who survives" not "how much will we survive with."

Now I see they are recalling chinese tires. I'm almost tempted to think they are attempting to kill us off with all of these products.

And we need RON PAUL in office to get rid of the federal reserve.

There is a really good book out there I read a year ago about how China could attack the U.S. Militarily via NK or Japan, economically, or cyber attack (which apparantly they have an entire cyber warfare agency). - ETA I can't remember it and can't find it, musta let someone borrow it

Military Power of the People’s Republic of China 2007 - FYI

[rev214]

"But the most important reason why China will not retaliate the way conspiracy-mongers like Evans-Pritchard think is because the Chinese would suffer a massive capital loss if they tried to hurt us by dumping their dollars.

They're buying euros, though. Like their good friend Iran is doing. Pressure on the dollar.

[dgg9]

Originally Posted by ChamberedRound

I'm not an economist by any means, but this is how I'm seeing the current situation; take it FWIW.

We've been borrowing MASSIVE amounts of money from China to fund the war in Iraq. If they decide to call in the loans,

They can't "call in the loans." T Bonds are redeemable at maturity, not before. Of course, there is a vigorous SECONDARY market where third parties can buy and sell T Bonds, but the US Gov't -- the borrower in this case -- can not be forced to repay before maturity date.

As far as the secondary market, you really can't dump too many Bonds because you need a buyer willing to pay what you ask, and the very act of dumping a lot of them depresses their market value.

[dgg9]

Originally Posted by RoyJackson

Anyone who believes China wouldn't do this is a fool. Short term (relatively speaking) losses vs. long term gains is in China's interest. Long term gain, in this case, is geo-political power.

It's possible of course that China would choose to destroy their economy in order to destroy ours, but that doesn't seem like a sane bet.

Well, we'll just have to see what happens, won't we? Then we'll know who the fool is.

[brewguy]

Originally Posted by dgg9

It's possible of course that China would choose to destroy their economy in order to destroy ours, but that doesn't seem like a sane bet.

Well, we'll just have to see what happens, won't we? Then we'll know who the fool is.

I highly doubt they would do that as well. The real test is going to be if our government caves in or not.

[RandomTask]

Originally Posted by MarcS

I'm now strongly considering putting a good chunk of it into precious metals.

... and ammo.

[RandomTask]

Originally Posted by dgg9

It's possible of course that China would choose to destroy their economy in order to destroy ours, but that doesn't seem like a sane bet.

China only recently came out of the 'stone age', and the vast majority of their people still shit in a trough and eat bugs. I think they could handle going back to the stone age better than we could.

[dgg9]

Originally Posted by RandomTask

China only recently came out of the 'stone age', and the vast majority of their people still shit in a trough and eat bugs. I think they could handle going back to the stone age better than we could.

Could be, but the opinions of the "vast majority" in China are not really a factor. Chinese government will decide this matter and I don't see them as self-destructive ideological madmen. Indeed, with each passing decade, I see China's dictators as less ideological and more straightforwardly self-interested gangsters. In that sense, China and Russia in this century are similar.

China is not North Korea.