China appears to be concerned about all this destruction of the worth of the dollar by the Fed and the US Treasury. The Chinese Premier has indicated that he is concerned about the value of China’s enormous investment in US debt and treasuries. China already took damage on Fannie Mae and Freddie Mac, and they are crossing their fingers not to see more chopping in their portfolio of US assets.
In fact, China has already made their statement without naming names. There is an essay posted on the People’s Bank of China website calling for a new reserve currency.
If China succeeds in having the world consider such an endeavor, the US dollar would plummet in value as various countries would no longer need to keep reserves to do business around the world. The idea would create more stability on one hand, but would be a huge disaster in the short term.
The US should be worried about this. In the long term, the US needs to untangle from China debt anyway, but it needs to be orderly. Disorderly changes, would be a mess and could cause issues like $10 gas prices.
People should be very concerned about this, and traders should be taking notes. The dollar is looking steady at the moment, but what does the future hold?
In fact, China has already made their statement without naming names. There is an essay posted on the People’s Bank of China website calling for a new reserve currency.
If China succeeds in having the world consider such an endeavor, the US dollar would plummet in value as various countries would no longer need to keep reserves to do business around the world. The idea would create more stability on one hand, but would be a huge disaster in the short term.
The US should be worried about this. In the long term, the US needs to untangle from China debt anyway, but it needs to be orderly. Disorderly changes, would be a mess and could cause issues like $10 gas prices.
People should be very concerned about this, and traders should be taking notes. The dollar is looking steady at the moment, but what does the future hold?
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