The Chinese government announced today that it plans to dump $1.4 trillion USD on the international currency exchange in favor of the more stable Euro.
This move will flood the currency market with USD and drive the value of the dollar down much further than the all time low it is now.
The effects of this move will be hard felt here in the USA. Anyone care to predict the outcome?
Will we see $200 a barrel oil by January?
Is this a good time to trade your USD for Canadian money?
2007-11-07 03:26:47 · 15 answers · asked by Overt Operative 6 in Politics & Government ➔ Politics
Here's the link for those of you who asked.
http://biz.yahoo.com/ap/071107/wall_street.html
2007-11-07 04:14:12 · update #1
This clearly demonstrates the devestation of the Bush Administration, and also shows that the US should stop trading with China. The "free traders" in Congress and the white house are ruining our country.
2007-11-07 03:30:45 · answer #1 · answered by Zardoz 7 · 15⤊ 2⤋
Yes it would be nasty news, and maybe while not the nastiest (war would be worst as other posters note) I'm wondering whether it happened at all.
So just where is this announcement anyway? The last time China made this kind of announcement (they indicated an intent to shift their holdings away from dollars in January 2006) they made it through the State Administration of Foreign Exchange. However, when I check SAFE's website their last announcement was made October 27. A link or reference of any sort would be appreciated to get a handle on what (if anything) we're dealing with, since this would be big news.
Also, as others like libsticker note it's not clear whether China would hurt themselves almost as badly as the U.S. by dumping so much currency in one throw. Consider:
* China has huge dollar holdings, and the value of those would drop.
* The global petroleum market is valued in US Dollars, and a drop in the dollar would increase oil prices. Right now China is the biggest petroleum consumer in the world so that would actually hurt them more than anyone.
2007-11-07 03:57:05 · answer #2 · answered by Ralph S 3 · 3⤊ 0⤋
Well, they will certainly trade some of it, but certainly not all!
China must succeed to sell it and doing so will drive the $ down. So they will sell by chunks to reduce the impact on the $ value, as if they don't do so, they will end up losing billions because of the value dispreancies.
But if China decide to dump all of inside a short period of time, then the US will be in deep troubles!! If China is doing this, its because they want to use leverage against the US for some reasons, and it won't work, as if they do so, they also weakened themselves economically! And since economy is synonimous of stability in China, they must act carefully...
2007-11-07 05:31:29 · answer #3 · answered by Jedi squirrels 5 · 1⤊ 0⤋
I am sure part of the problem is the american market. The toys that had lead based paint were not only shipped here but to other parts of the world. china's exports are a large part of their economy. Humm, seems funny that we owe them money. Wonder if they will demand payment in full???
2016-04-02 22:26:40 · answer #4 · answered by Jane 4 · 0⤊ 0⤋
I saw this coming.. It's not IF, but WHEN..
Canadian dollars are a good bet, and so are the Brazilian Reals, and Australian dollars also - any country that has a growing economy due to having vast natural resources (e.g., oil and gas) is a good bet.
Better yet, you can trade your FRNs (Federal Reserve Notes) for gold and silver, because gold and silver are appreciating against ALL fiat currencies (paper money).
Silver is cheaper, so buy silver.
2007-11-07 04:52:15 · answer #5 · answered by Think Richly™ 5 · 4⤊ 0⤋
China is the greatest threat to the United States, if not the world.
They bleed money and industry from us, make shady deals with dangerous nations, and are slowly poisoning US Citizens with contaminated goods.
How anyone could have ignored the red lights on this deal is beyond my scope of reason.
2007-11-07 04:23:02 · answer #6 · answered by tiny Valkyrie 7 · 3⤊ 0⤋
I felt my blood boil when the US started trading and dealing with communists. Our grandfathers would be rolling over in their graves if they knew whats taking place here in the country they fought for. I too have been contemplating what to do with our savings. It looks like the US is heading for another depression and fast. However if people panic thats exactly what WILL happen. With Bush at the helm though, I wonder if it will even matter.
2007-11-07 04:06:08 · answer #7 · answered by Enigma 6 · 5⤊ 0⤋
Wait what is that I hear. Oh its the conservatives trying to make up a positive spin on this. Just the other day Rush Limbaugh said the economy is the best its been in ten years. Did he lie again? Bush says don't worry it will be ok if we bury our heads in the sand and repeat its ok its ok.
Ok conservatives get ready to lie on how this is good for the economy and blame the democrats for the dollar value dropping.
2007-11-07 03:39:46 · answer #8 · answered by john a 6 · 9⤊ 1⤋
Certainly not good news for the dollar...but that has been coming for awhile. China isn't the first and won't be the last to do so...
2007-11-07 03:42:17 · answer #9 · answered by Run Lola Run 4 · 5⤊ 0⤋
China is our worst enemy worst than the so called terrorism, invented by Bush & Co, where do you think Bin Laden lives ?(not hide) in China.
2007-11-07 03:35:48 · answer #10 · answered by emilia d 3 · 6⤊ 1⤋
The worst possible news would be if China declared war on USA.
This is extremely serious if true.
We can hope that some other nations like Japan will buy up some of this.
However, in the long run, maybe it will get Congress to clean up the budget, deficit spending, trade imbalance, export of jobs, etc. etc. but dream on.
The best we can hope for is that fixing some of this becomes an issue in the Presidential Campaign.
2007-11-07 03:31:38 · answer #11 · answered by Anonymous · 9⤊ 0⤋