Breaking: China To Dump One Trillion In U.s. Reserves!!!!

BREAKING: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!

December 15

BEIJING, CHINA. -- Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China's Currency Reserves and convert those funds into Euros!

China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.

According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:

1) The Federal Reserve Bank ceased publishing "M3" data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.

2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.

3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.

For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; "we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts."

Early this week, in an unusual move, the Bush administration sent virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Dec. 14 and 15.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.

The Bush administration wanted to get China's cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.

According to the source, Fed Chairman Bernanke left the meeting "pale and in a cold sweat" as the implications of China's decision seemed to sink in.

The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.

This would cause a worldwide sell-off of dollars, create almost immediate "hyper-inflation" in the US and also impact world markets at a level "worse than the Great Depression of 1929."

Arabs to the rescue?

In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S.!

Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they "would not be inclined to sell oil to any particular nation that intentionally caused such a collapse."

This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.

The OPEC officials even went so far as to say "Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off."

Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .

Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.

If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the jewish state to preserve itself.

http://www.halturnershow.com/ChinaToDumpUSDollars.html

 

America is a well developed industrial country. Although it has a signifcant defecit, Canada managed with a much higher Debt-to-gdp ratio for a much longer time without our currency collapsing.

Secondly, the value of the American dollar is determined in currency markets, not by the amount printed.

Third, China needs America. China's export based economy is extremely dependent on the American market.

China does like a strong American dollar, and it does peg the Yuan artificially low in a pretty intense dirty-float. But the odds of it cashing in that much money? Pretty damn low.

I wouldn't take anything talk shows on Radios say seriously. Its more entertainment than news.

Of course, maybe I'm wrong and its a terrible tragedy. But I guess we'll find out come Monday.

 

The story has no credibility whatsoever - SOLVE ET COAGULA IS A NAZI SPAMMER and Hal Turner is a right wing extremist who is sadly out of date with his views and his understanding of world affairs - his right wing cronies seem to be the only ones carrying this story which means they will say "ah yeah but thats because of a goddam commie plot" which shows these people are stuck in the past and would need a boot the size of texas to kick them up the ass into the 21st century

sadly for these extreme right wingers they are saying the chinese want to dump u.s dollars before everyonelse dumps theirs or they will lose their shirts
infact if everyone dumped their u.s dollars just ask, and buy whose currency exactly? their own? none of it makes sense - if Europe dumped their dollars they could only be buying into north asia or china the Euro is too strong against the dollar so it makes sense to buy dollars rather than sell them -
if china sells dollars first - a trillion US dollars is nothing it would be a drop in the ocean and besides only Europe would buy them - who else so if Europe bought them why would they then sell a devalued dollar?

 

Well there are other articles to this effect on stock market sites, to ignore it is let a few gain again in the financial markets. Perhaps that's the plan. Bet the Bush family doesn't lose their shorts, they didn't during the Savings and Loans scandals. They won't this time either, Bechtel and Carlyle are receiving too many proceeds off the deficit through the Iraqi war.

Hey transfer you funds to them and Blackwater and you might come out ahead of the curve.

Many of you write Coaluga off, as a spammer, but a lot of his posts have groundings in fact.

Check back with us in few months and let's see how in valid his facts were.

 

Want to stay stupid then don't bother with this site:

http://dunwalke.com/

 

Did you know that Iran is the biggest oil supplier to China? Now Iran will only accept Euro from the Chinese Government, guess what?

 

informative site. Thanks!!

 

Well I went there - read a seriously long and boring advert about a bank - fell asleep woke up 10 mins later none the wiser
whats it trying to say apart from invest in capitalism?

 

one day a man walks into a shop and buys a chocolate bar for one american dollar
the next day he walks into the shop and offers one american dollar for another chocolate bar, except this time the shop keeper tells him that american dollars are no longer accepted only euros. guess what, the next day the man returns with euros to buy his chocolate bar.

a currency's worth is based upon its acceptance by a seller/merchant etc.

any country unwilling to accept the american dollar will of course become an immediate target by the american military. if you won't accept the american dollar be prepared to be bombed.

 

Dollar will continue to depreciate

December 15, 2006.

At the end of last month, the US dollar against the Euro depreciated to its lowest in the last 20 months on the New York Foreign Exchange Market, while the dollar against the British pound depreciated to the lowest in 14 years. On Monday, the Euro closed at 1:1.3251 against the dollar and the previous day it closed at 1:1.3200. The pound closed at 1:1.9587 against the dollar and the previous day it closed at 1:1.9525. The dollar to Swiss Francs also fell to 1:1.2014 from 1:1.2049 the previous day.

The weak dollar is a reflection of the long-term depreciation of the US dollar. Over the last three years, the US dollar against the Euro has depreciated by 35 percent and against the Japanese Yen, 24 percent. Since February 2002 against a package of currencies, the US dollar has depreciated by 23 percent.

Various indicators suggest that the US dollar will continue to depreciate. Why?

One of the main reasons for the depreciation of the US dollar depreciation is the slowdown of the domestic economy.

Ge Huayong, Executive Director of the International Monetary Fund in China, told reporters that from a macro-economic perspective, the US dollar will continue to depreciate because of the global economic situation. Various indicators suggest the US economy will slow between the end of this year and the beginning of the next while there is good reason to expect European economic growth. The Japanese economy is showing signs of a revival while the emerging market economies of countries like China and India continue to have strong growth momentum.

The changes in the global economic situation have led to a change in the floating direction of foreign investment, another factor in the depreciation of the US dollar.

Ge Huayong said that from a micro-economic point of view, the main reason for the depreciation of the dollar was market speculation on forex reserves. It was anticipated that some countries with large foreign exchange reserves in US dollars would be looking to reduce their US dollar reserves. The European Central Bank increased the interest rate again to encourage investors to sell their dollars and buy Euro. The US real estate market has slowed leading to a significant downturn in consumer confidence.

Another reason for the depreciation of the dollar is that the US government has not yet intervened. Analysts say the US government has been compliant in the depreciation of the dollar. The depreciation of the dollar promotes the export of US products and reduces trade imbalances. In the long run, the stimulus of demand and an increase in savings will help reduce the double deficit to a point where it is sustainable. In the meantime, the depreciation will substantially reduce the US' foreign debts. The advantages of the depreciation outweigh the disadvantages, so the government is unlikely to intervene. It is interesting to see that the US government supports the depreciation, but that both US Treasury Secretary Henry Paulson and his predecessor John W. Snow believe that a strong dollar is in the interest of America.

Some American researchers believe that the policy of a strong US dollar has died. The US hopes the dollar will depreciate in an orderly fashion, but are not willing to announce this openly. If they did so, the rate of depreciation would accelerate and the country is unwilling to let the dollar fall so quickly.

US decision-makers believe the depreciation is a good way to resolve imbalances in the US economy. However, the American people are complaining. Domestic goods are very cheap, but due to depreciation, imported products are increasing in price. More importantly, it will be more expensive for Americans to travel to Europe, Japan or any other country. Many people have already abandoned their travel plans to Europe because of the expense.

The depreciation of the US dollar and the appreciation of the RMB have reduced China's export competitiveness. Due to a decrease in the import of Chinese-made Christmas gifts to the US, there is a shortage of Christmas gifts on the US market. It is expected that Santa Claus might not have so many gifts to send out this year.

The US dollar cannot depreciate too quickly as this would be a big problem for the world economy. British economists say that if the US dollar depreciates too quickly, it will affect the "global bubble". It will cause new inflation pressure so that the banks will not be able to shield the collapse of the real estate market. If that happened, the whole world would be affected.

Ge Huayong agrees with this. He says the US dollar must depreciate gradually in an orderly fashion by just a small margin at a time so as not to affect the world economy. If the dollar depreciates on a large scale, the global economy would have to bear the consequences and emerging economic powers like China would take a heavy blow as much of their foreign exchange reserves are in US dollars.

However, Mr. Ge believes that there are many positive things about the US economy and the complete US financial market which are keeping the dollar stable and the possibility of a crash to a minimum.

By People's Daily Online

http://english.people.com.cn/200612/15/eng20061215_332934.html

 

A CURRENCY IN DECLINE - How Dangerous is the Dollar Drop?

December 12, 2006

By Christian Reiermann
Is an end of an era looming in the foreign exchange markets? The dollar has been depreciating against the euro for weeks. Currency experts and the German government don't yet see this as cause for alarm. The US currency's role as a lead currency isn't as important as it used to be, they say.

Like most central bankers, Jean-Claude Trichet, the president of the European Central Bank (ECB), has a penchant for cryptic comments. Injecting a certain degree of incomprehensibility is a signal to the professionals that he's competent. And when it comes to laymen, industry jargon has the desired effect of generating the necessary respect.
Last Thursday the public was treated to yet another example of Trichet's convoluted speaking style. A number of risks, the ECB president said, could jeopardize a generally favorable economic outlook in the euro zone. They included, according to Trichet, "concerns regarding possible uncontrolled developments triggered by global economic imbalances."

What Europe's most powerful protector of the currency was actually saying was this: The gradual decline of the dollar in the foreign currency markets in recent weeks could pose a threat to the economy. What Trichet was also trying to broadcast is that the ECB has recognized and is aware of the threat.

Nevertheless, the European Central Bank in Frankfurt again increased its key interest rate on Thursday by a quarter percentage point to 3.5 percent, which makes the euro more attractive to international investors. The central bankers had no choice but to take the step, having already announced their intentions weeks ago.

Experts have been predicting for some time that the dollar would eventually go into a nosedive, and now that time seems to have come. The US currency has lost five percent of its value against the euro since late October, and 13 percent since the beginning of the year. The euro is currently fluctuating around a value of $1.33, which is only 3 cents away from its all-time high in 2004. And yet Trichet's counterpart Ben Bernanke, the chairman of the US Federal Reserve, has done nothing but look on as the dollar plunges.

A sea change appears to be taking place on the international financial markets. For years, global capital flowed in only one direction, with $2 billion going into the United States every day. Investors viewed the world's largest economy not only as a bastion of stability, but also as a place that promised the best deals, the most lucrative returns and the highest growth rates.

The Americans, for their part, welcomed foreign investment. For them, it was almost a tradition to save very little and spend more than they earned -- essentially achieving affluence on credit. Foreigners financed the Americans' almost obsessive consumer spending, which spurred worldwide economic growth for years.
Because the US government was unable to fall back on the savings of its citizens, it too was forced to finance its budget deficit with foreign capital. Both consumer spending and the federal deficit kept the dollar high, because the rest of the world was practically scrambling to invest in the United States.

This phase seems to have come to an end, at least for the time being. "There are fundamental weaknesses in the American economy. This could not continue in the long term," says Alfred Steinherr, chief economist at the German Institute for Economic Research (DIW).

Investors pulling out

Investors worldwide are becoming sceptical and starting to pull their money out of the United States. They have realized that a people and a country cannot live beyond their means in the long term. The US dollar's exchange rate is starting to crumble as a result of this withdrawal.

The depreciation is causing growing concern about what will happen to the global economy if the United States loses its role as an engine of growth. If German cars, machinery and services become more expensive, will the German economic recovery end before it has really started?

The German government isn't worried yet, at least not officially. Nevertheless, experts in the finance and economics ministries have been keeping a close eye on developments. Although they continue to believe that the changes still fall within the scope of long-term averages, they don't rule out that the situation could worsen.

They believe that a first critical threshold for the competitiveness of the German economy will be reached at an exchange rate of about $1.36 per euro, and that Germany could see major difficulties at rates in the neighborhood of $1.50. If there is turbulence in the foreign currency markets, the government in Berlin will find itself in an especially challenging position. In early 2007, Germany will assume the chairmanship of the so-called G8 group of seven major industrialized nations plus Russia.

Worried about the dollar: The guardian of the euro, European Central Bank President Jean-Claude Trichet.

The G8 has repeatedly engaged in crisis management to deal with problems in the international financial system. It did so in the 1980s, when the combined forces of the G8 were needed to put a stop to the soaring dollar. It stepped in with equal verve a few years to forestall a decline in the American currency with the so-called Louvre Accord.
There are two principal causes behind the most recent development. Both have to do with the fact that Europe is becoming more attractive for international investors compared to the United States. On the one hand, interest rates in Europe and the United States are moving in opposite directions. "The ECB will continue to raise its key rates next year, whereas interest rates appear to have peaked in the USA," says Joachim Scheide, an expert on the economy at the Global Economic Institute (IFW) in the northern German city of Kiel. This means that financial investments denominated in euros are yielding higher interest and are in greater demand internationally, which in turn leads to a rise in the euro.

The prospects for growth are also shifting. The US economy is cooling off. The government recently lowered its 3.3 percent growth forecast for 2007. If Americans consume less as a result of a decline in foreign capital investment, the United States could even face a prolonged period of more modest growth.

Germany has shed 'sick man' image

By contrast the euro zone economy is robust. Germany, in particular, has surprised many with a stream of good economic news. Unemployment dropped below the psychologically critical threshold of four million in November. The Ifo business climate index, which measures the expectations of businesses, is at its highest point in 15 years, while consumer confidence has reached a five-year high.

In the last quarter of this year Germany, long considered the sick man of Europe, will have transformed itself into an engine of economic growth. According to analysts at Postbank, Germany's annual growth, projected at 3.4 percent, will even exceed that of the United States this year.

This is the kind of news that fuels the expectations of investors who now prefer to invest their money in the euro zone. The result is an increase in the exchange rate for the European Union's common currency. But how will the decline in the dollar's value affect future economic development? Could it cause a major imbalance in the global economy, or will the global economy, and Germany, get off lightly?

Pessimists are quick to come out of the woodwork whenever a major shift in the financial markets approaches. Many economists and bank analysts, especially in the United States, believe that the correction will happen very suddenly, with the dollar depreciating by 10 to 30 percent within a short period of time.

This would inevitably cause an adjustment crisis. Growth rates would plunge worldwide and a global recession, coupled with a drastic jump in unemployment, could follow.

This doomsday scenario is by no means the majority view. Some experts, especially in Germany, are more optimistic. "The US trade deficit has grown in the course of a few years," says IFW expert Scheide. "It will also gradually decline over a period of several years."

Scheide expects the dollar to lose another 10 percent in value against the euro in the next five years, a scenario that would be much easier to handle for the German and European economies. Companies would have sufficient time to adjust to changes in exchange rates. "In that case even an exchange rate of 1.40 wouldn't be disastrous," said DIW analyst Steinherr.

Germany is a good example of how effectively this can work. Despite the fact that the dollar has lost half of its value against the euro since 2002, exports have not been adversely affected. Indeed, they even increased from Û651 billion ($861 billion) to Û786 billion ($1.04 triilion). The Germany economy exported more than ever before in October.

Another reason is that the dollar zone is no longer as important for German exports as it was only a few decades ago. Leaving aside exceptions such as the auto industry, other regions of the world have long since become more important to the German economy than the United States, where Germany now sells less than one-tenth of its exports. Germany exports more than 40 percent of its goods and services to other countries within the euro zone, 13 percent to eastern Europe and nine percent to Asia. The turbulence surrounding the dollar has had virtually no effect on German exports to neighboring European countries. Most of the EU's new members have tied their currencies to the euro, and exchange rate risks evaporated for western Europe with the introduction of the euro.

The euro even prevents the kinds of major upheavals in Europe that occurred in the past whenever the dollar fell. When that happened, German businesses and consumers were routinely forced to bear a greater burden of adjustment than the economies of neighboring countries. In the past, if the German mark gained 10 percent in value against the dollar, the French franc or the Italian lira would only gain six or seven percent. As a result, the German mark was overvalued relative to other European currencies, which translated into economic disadvantages for the German economy.

This mechanism was eliminated when the euro was introduced. Now all member states carry the same burden.

The consequences of a declining dollar for the German and European economy will be determined in large part by the way other currencies develop relative to the dollar. "It would be fatal if only the euro were to rise," says DIW analyst Steinherr. "Then it would only be the euro zone that would have to bear the burden of adjustment." But the foreign currency markets suggest a different development, as the dollar is also losing value in relation to other important currencies.

The British pound, for example, rose to new highs last week. Even more importantly, the currencies of east Asian growth regions are also appreciating against the dollar. The Thai Baht, for example, gained about 15 percent against the dollar in 2006, while the South Korean Won gained 10 percent. Even the Chinese Yuan, which slavishly followed the dollar in the past, gained more than three percent. Virtually every economy is bearing part of the burden of adjustment.
The decline in the dollar also has its advantages. For Germany, the greatest advantage is that Germans pay less for oil. The oil price is mainly set in dollars worldwide. If the dollar declines, the same amount of oil costs Europe fewer euros, and the money the Europeans save can be spent on other goods.

A similar dynamic applies to exports from the dollar zone. If the decline in the dollar continues, computers, software licenses and machinery from the United States will become less expensive. Both developments would represent a windfall for companies and people in the euro zone, because the same amount of money would buy more goods.

The perils of a currency crash are not nearly as great as they were in the days of the dollar's absolute dominance 30 or 40 years ago. Globalization has led to the development of a number of growth centers in the world economy which share the burden of turbulence. Gone are the days when an American finance minister could boast: "The dollar is our currency, but it's your problem."

Translated from the German by Christopher Sultan

http://www.spiegel.de/international/spiegel/0,1518,453906,00.html

 

Thats good isnt it? a weak currency means more exports for the USA
Its good for your capitalists that export but bad for the home market - all you can be worried about is the home market and sense tells you that as long as the export $$$$$ are put back into the US economy then thats fine - you only got to worry if they export AND invest the profits in another economy but that wouldnt make sense
Either The British and chinese are secretly rubbing their hands in glee waiting for the dollar to crash (which dont make sense)- or you got to ask
If theyre so worried about the global economy - why would they dump the dollar? That would mean it fell further - Thats what the World Bank is for and the WTO
none of the story makes a damned bit of sense as the model it uses is too simple

Either china and Britain want the dollar to fall or they want to buy cheap american goods - its a strong export economy for the USA and one that builds jobs - eventually you will get more out of this than you put in
the only problem is you will have to pay more for goods in the USA while we buy your stuff cheap . A lot will be chucked out of work but thats fine so long as they blame it on the chinese and not their own shortsighted management of the economy - theyre just seeing what line of bullshit you all fall for It just means a depressed U.S economy is on its way for a couple of years

China couldnt dump its dollars because that would weaken its own currency too - theyre enjoying cheap us imports at the expense of their own export business so why are they losing - they can do that for years and then will have to build up their own exports and drop their own currency prices to do it - and that would be a better way, as by that time economics will be in a different position - you cant import for too long and a balanced economy is stagnant