← Autodidact Archive · Original Dissent · Ponce
Thread ID: 17374 | Posts: 2 | Started: 2005-03-18
2005-03-18 02:25 | User Profile
China says that they would dump all their Yankee fiats if the US keeps getting in the way between China and Taiwan.......that's what? about 3.5 billion? or trillion? what would happen if they were to do that?
2005-03-18 03:09 | User Profile
Associated Press Report: China's Foreign Reserves Fall 03.11.2005, 03:34 AM
China cut the share of its foreign reserves held in U.S. dollar assets last year, suggesting that the United States might no longer be able to rely on Asia to finance growing deficits, investment bank Lehman Brothers said in a report this week.
China's has the world's second-largest foreign currency reserves after Japan, with the equivalent of nearly US$610 billion (euro470 billion) at the end of 2004. That rose by US$209.9 billion (euro161.5 billion) last year, driven in part by a surging trade surplus.
Even as the reserves grew, the share of dollar assets held by China's central bank fell to 76 percent, down from 82 percent in 2003, Lehman Brothers said.
The bank "is slowly diversifying its FX (foreign-exchange) reserves away from U.S. dollars," said the report, written by London-based analyst Shruti Sood.
The Chinese government won't disclose the composition of its foreign reserves, but acknowledges that most are in U.S. Treasury bills and other dollar assets.
Japanese Prime Minister Junichiro Koizumi and South Korean officials have said their own governments should diversify their foreign currency reserves, reducing reliance on the dollar.
Combined with those comments, the results of research on Chinese holdings suggests that the United States might no longer be able to rely on Asian official financing for its growing current account deficit, the report said.
China's chief foreign exchange regulator said last weekend that Beijing had no plans to change the structure of its reserves due to short-term changes in currency values.
"If we sell U.S. dollars now when it is tumbling, it means we lose money," said Guo Shuqing, director of the State Administration of Foreign Exchange. "If we do sell them, we have to buy other currencies such as the euro. But what if the euro drops?" [url]http://www.forbes.com/home/feeds/ap/2005/03/11/ap1878397.html[/url]
Ponce,
I don't think they would dump all of them at once. Just enough to get the Bush Administration's attention and for the moment that would be only over some stupid thing we might do in regard to Iran. They get a large amount of their oil there. As for Taiwan they don't have the amphibious capability to land more than a division at this time, but they are working to increase this with a large ship building program.
Walter, myself and some others have written about this on this board. You might try a search here for more scenarios about this threat.