Top Chinese official signals move away from dollar

[Amerigo Vespucci]

Source: The Raw Story

The Chinese are becoming increasingly wary of the growing supply of U.S. dollars, leading the head of the nation’s green energy initiatives to signal a move away from dollar reserves and toward, gold, euros and yen, according to a published report.

“We hope there will be a change in monetary policy as soon as they have positive growth again,” said Cheng Siwei, former vice-chairman of the Standing Committee, according to The Telegraph.

He added: “If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies.”

Siwei also noted that China is especially interested in purchasing gold, but will move methodically in that arena so as not to agitate the market.

Read more: http://rawstory.com/08/news/2009/09/07/china-objects-to-dollars-growing-liquidity/

[Deja Q]

1. Logical. Never spring a trap while sitting on the trigger with the prey. Step off the trigger first.

[Pavulon]

2. A trap made of lead, melamine, and environmental

disasters where human meat puppets supply the body shops..

[Trajan]

4. And ....

The world's multinational corporations lining up to fill the pockets of elite Chinese party members for the privilege of using those using Chinese manufacturing workers for a little while to build their next plastic doodad ... All without worrying about shit like environments and poisonous byproducts ....

[Lagomorph]

3. They're right about one thing,

We shouldn't be printing money. There's nothing to back it with. It's time to tighten the belt a few notches. It ain't gonna be pretty, though. We may yet see what the rest of the world calls poverty, the hungry kind. If we don't, it could get a lot worse than this.

[lovuian]

5. the first way we tighten the belts

is quit paying China

and get out of Iraq and Afghanistan

if they destroy the dollar they will fall too

and Gold has been tried and it doesn't work

[rhett o rick]

15. We aint gona tighten our belt and get er done. We are gona pretend nothins wrong

until it is way too late.

[Old Hob]

16. truth in its purest form. nt

[bossy22]

6. talk is cheap

the chinese are playing politics at the world stage...they may start to diversify, but the dollar will still probably be where most of their investments will be held...

without them buying our debts, we can't spend money on their goods...and if we dont buy their goods (since they are almost an export only economy), there economy (along with ours) will tank

[pattmarty]

8. I agree at the present. One thing though, the Chinese have proven..................

..............themselves to be very adaptable "communists". Remember another thing, they have a dictatorship, a lot easier form of government to "turn" quicker unlike us who still have somewhat of a Democracy. In 20 yrs, maybe 10, the Chinese are going to be "the shit".

[bossy22]

10. i'm not sure

though it is possible what you say, we have to remember china has and will have its own problems... such as a large food shortage in the near future, increased education level of its population (leading to more pro-democracy movement)

plus their authoritative regime does not get looked upon with positive eyes at the world stage

[lib2DaBone]

7. While we are all focused on Obama's School Speech...

.. the U.S. Currency is going down the tubes.

Brilliant Media Coverage.

[bossy22]

9. not quite

whenever we have economic/fiscal hard times, the media likes to scream "the sky is falling", but some how we always make it through.

we racked up many more times our current debt back in WWII and we did just fine. The dollar may take a bit of a dip but overall as long as the US Govt stays stable, it will never "go down the tubes"

[Betty Karlson]

11. In the final days of the French franc

a similar announcement was made - by a French speculant no less. He speculated to intimate a move away from the French monetary unit. Other speculators took notice.

When he began selling French francs only days later(1992), a frenzy came over his collaegues. In one day, the French franc fell by double digits. The European Monetary Fund, responsable for maintaining the margins of exchange rates, had to step in and still had to depreciate the franc to give it some margin again (it had fallen below the minimum exchange rates stipulated).

If speculators - in this case - are nations rather than individuals, reactions may be the same. First comes the announcement. Shortly after, one nation (China) may drop the Dollar, and more may follow. But who will play the role of Monetary Fund this time round? Japan? I'm not sure if their new government is into that idea...

Remember that in the Bush years, many nations speculated about a move away from the Dollar - most noteworthy among them oil-exporting countries like Qatar. For the United States, having to pay for oil in Euros would be desastrous with the Dollar in a free fall. Now THAT would give some inflation - not to mention an eery lot of encouragement to fascistoid resentment.

[Aragorn]

12. inflation will occur

whether the dollar remains China's standard or not. It already is despite the recession/depression. Wait until that improves. BAM!

It is unavoidable when you print so much money. And by that I mean spend money that ain't there -

The accompanying article about UN position on the dollar shows that it can also get worse due to lack of confidence in the dollar, which the same old con game in US/British banks IS.

[psychopomp]

13. China, Japan and India will all look to develop an Asian market

leaving the US out in the cold. The writing is on the wall here, folks, and it says "Thanks for your dollar-fueled growth, we won't need you much longer."

[Yupster]

14. The Chinese have to find a place for all the dollars they're accumulating

Expect them to continue buying US companies and properties.

I guess so far the Hummer brand is the most visible thing they've bought, but there's a lot going on with small businesses and even homes being bought by Chinese investors.