Author Topic: China is doing all they can to destroy the US dollar  (Read 1581 times)

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Offline 5412

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China is doing all they can to destroy the US dollar
« on: May 23, 2009, 08:48:19 AM »
Hi,

I was out of town for a week and just caught up on my reading.  One of the services I get daily is a blurb from a course I signed up for called  FX University Daily, which is a publication of the World Currency Watch.  Last night I read ten days worth of material and a very distinct pattern is developing.

They are quite candid in predicting we are being lied to by our government and heading to some hyper inflation in the next few years.  In the meantime the Chinese are doing all they can to destroy our dollar as the world currency.  Consider the following:

1.  China is the leading commodity holder in the world.  They have been very active buying commodities all over the world, using our dollars for payment.  This not only gives them a great inflation hedge but helps them dump US dollars.

2.  They then signed a currency swap agreement with Argentina.

3.  They then signed a currency swap agreement with Brazil. 

Here is what the newsletter had to say on 5/20 on that issue.


"MORE PROOF CHINA WANT TO SINK THE DOLLAR...THIS TIME IN BRAZIL

Last week, we heard about how China had passed the US as the number one trade partner of Brazil.  Now, I'm hearing about how Brazil and China are in discussions to form a currency swap line, just like the one China signed with Argentina two weeks ago.

The currency swap lines are HUGE folks.  A swap-line allows the two parties conducting trade with one another to eliminate the use of dollars, and only use their own respective currencies.

That means, China reduces its exposure to the dollars!  And if China has less dollars to spend on US Treasuries, that's not a good thing!  But, almost as important at that, is how China is spreading the use of their currency.  Add that to their statements last month about a new reserve currency, and we could have a serious problem.".................



The advice on what we should do as Americans is interesting....particularly when it looks like the fed is lying and our dollars will become about as worthless as a Mexican peso.  There are several ETF's where one can buy Trust funds denominated in foreign currency.  Look under CurrencyShares- (followed by a particular countries currency).  If you have trouble finding them I can provide the various symbols.

Second thing they said is that countries that will benefit from a falling dollar and high inflation are those who export oil.  Canada and Australia are on the upswing.  The euro has come back around and they refer to it as the "anti-US" dollar.

There is also a bank in Jacksonville called Everbank which will sell CD's denominated in foreign currency and they are insured by the FDIC (boy that's a big deal right).  You can find them on the internet.  While the CD yields are small, one must factor in the anticipated currency appreciation to determine the real yield.

Please do not misunderstand this post.  I am not trying to give investment advice....not sure what I am going to do myself at this point.  Right now I am just trying to protect myself as I am retired.  I have begun buying gold outside the US and diversification into other currencies but still have a way to go.  The purpose of this thread is to give some warning that these folks (along with several others who I subscribe to) are pretty emphatic about the fact our government is flat lying to us.  We are heading off an economic cliff, the dollar is going to tank like we have never seen before, the elderly will see their life savings inflate into worthless paper all the while the government grabs even more power. 

For all of us that presents a challenge.  The government can confiscate the gold.......Roosevelt did it and then devalued the dollar by 60%....so you need to find ways to own gold that is not subject to confiscation.  Might be smart in some other metals as well.  Same thing with non-dollar denominated investments.  Would not put it past our government to confiscate all foreigh currency you own and give you worthless dollars in return.  What does that mean?  It means that you must pay attention to not only what you invest in, but where it is located so it is less likely to be confiscated.

I really feel sorry for the seniors who have a 401-K or and IRA that got out of the market in time before it tanked, invested in dollar denominated CD's who are unaware.  They will wake up one day and find their life savings is worth a small fraction of the buying power it once was.

Have a great Memorial Day Weekend,

5412





Offline 5412

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Re: China is doing all they can to destroy the US dollar
« Reply #1 on: May 23, 2009, 08:57:54 AM »
Hello Again,

No sooner do I post the above thread, then the following blurb hits my inbox.  While I think it is something to consider, my personal feeling is that the communist countries saw what happened to Russia when it collapsed economically and they would love to see the same thing happen to us.  It is a counter to my post and something to consider however. 

regards,
5412

Here is the blurb:



A Little Saturday Morning Musing…

Dear ..........Reader,

Pravda, that familiar old Russian newspaper, proudly proclaims “dollar no longer reserve currency of Russia.” A Bloomberg op-ed piece proclaims “Dollar is dirt, Treasuries are toast, AAA is gone.”

Oh, my. How quickly we come back to our old ways.

It seems that some of us have forgotten those harrowing days in the fall of last year. When Treasury yields made new all-time lows and the dollar surged with a vengeance across the board.

Yet here we are.

Now don’t mistake; I surely distrust the government as much as the next man. I believe the Fed should be audited. But I also believe that the opinions, expectations, and predictions of most people – especially financial writers – should likewise be audited and tempered.

The dollar is headed downhill in the Longview. But 41% of Russia’s reserves are still in dollars, and the story is the same across the globe. Nations from Eastern Europe to South America hold the majority of their reserves in dollars.

Coming into this crisis, the dollar was the world’s reserve currency. If global deflation persists beyond this blip of a rally – which a hosts of signs indicate to be nigh inevitable…and cash is king…then the global reserve currency is king. In other words: the dollar.

Is that a crude analogy? Absolutely! That’s why I love it. But keeping it in mind can give you a healthy sense of doubt…a proverbial “grain of salt” to fight back the waves of inflation-predicting, “dollar-trashing,” ratings-cut-is-nigh financial “experts.”

…Many of whom lacked the foresight to predict anything like what we saw in the second half of 2008. I think I’ll be keeping my grain of salt in the second half of 2009…


Offline NHSparky

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Re: China is doing all they can to destroy the US dollar
« Reply #2 on: May 23, 2009, 09:05:20 AM »
Problem is, if they want to destroy the dollar, it's cutting off their noses to spite their faces, considering the yuan is still connected to the dollar.  If they were REALLY serious, they'd let their currency float on its own.

Bottom line, they still need us more than we need them.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline 5412

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Re: China is doing all they can to destroy the US dollar
« Reply #3 on: May 23, 2009, 09:24:41 AM »
Problem is, if they want to destroy the dollar, it's cutting off their noses to spite their faces, considering the yuan is still connected to the dollar.  If they were REALLY serious, they'd let their currency float on its own.

Bottom line, they still need us more than we need them.

Hi,

I do not argue with your logic at all.  To me it is their political agenda versus logic.  I think the Chinese are egotistical enough to believe their yen can become the world currency....in their eyes that is likely the rightful place it should be....

My guess is one is better off spreading their risk and have some of your investments in other currencies.

But it is that, a guess....

5412
« Last Edit: May 23, 2009, 09:28:08 AM by 5412 »

Offline gcruse

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Re: China is doing all they can to destroy the US dollar
« Reply #4 on: May 23, 2009, 10:47:19 AM »
Problem is, if they want to destroy the dollar, it's cutting off their noses to spite their faces, considering the yuan is still connected to the dollar.  If they were REALLY serious, they'd let their currency float on its own.

Bottom line, they still need us more than we need them.
Quite right.  The counter view is Red Scare under a blanket.  It's still there, but we see it mainly as a bump.
That said, if the dollar wasn't the reserve currency,  would Obama be able to inflate his way out of a 12 trillion dollar debt?    I can hear some old guy at the Mint, "Stop the presses!  The jig is up!"

Offline NHSparky

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Re: China is doing all they can to destroy the US dollar
« Reply #5 on: May 23, 2009, 11:08:47 AM »
Oh, absolutely correct.  The only reason the Chinese have a pot to piss in to begin with is because they can have a $250 BILLION/year trade surplus with us.

Of course, they can afford to flood Wally World, etc., with all those cheap Chinese-made goods because they don't have to worry about those silly little things like trademarks, labor laws, environmental laws, silly stuff like that. 

But when our economy tanks, theirs tanks that much more.  If in fact the playing field (i.e., production, et al) were leveled, the Chinese would simply no longer be able to compete.  If this (or any) administration nutted up and demanded a level playing field, even if the Chinese no longer bought any of our debt (mainly because they couldn't afford it anymore), it would force THIS government to act in a more responsible manner.

Right now, people (rightly) see the dollar as a paper tiger when nearly half of all federal spending is financed by borrowing.  I'm sorry, when did half of your household budget come from loans?  You may take out loans to buy a house, have a credit card, etc., but few people can long last by getting more loans to cover the initial financial obligations.

No, the Chinese are not our worst enemy right now--our own fiscal irresponsibility is far worse.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline Chris_

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Re: China is doing all they can to destroy the US dollar
« Reply #6 on: May 23, 2009, 11:38:07 AM »
Problem is, if they want to destroy the dollar, it's cutting off their noses to spite their faces, considering the yuan is still connected to the dollar.  If they were REALLY serious, they'd let their currency float on its own.

Bottom line, they still need us more than we need them.

Not really.

I heard on the radio this week that it was recently figured out (I think CBO might have had a hand in this study, but I can't find an online source at the moment; I'll keep looking) that the US constitutes only 5% of Chinese commercial business.  Cutting off a client amounting to 5% of your business, that is having an increasingly difficult time paying for the goods he's bought from you on increasingly shaky credit may hurt you a little.

But you'll survive.
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Offline gcruse

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Re: China is doing all they can to destroy the US dollar
« Reply #7 on: May 23, 2009, 11:48:49 AM »

No, the Chinese are not our worst enemy right now--our own fiscal irresponsibility is far worse.
Word.

Offline BadCat

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Re: China is doing all they can to destroy the US dollar
« Reply #8 on: May 25, 2009, 09:55:29 AM »
I read an article that said that Chicoms are swapping their US dollars for gold at a pretty good pace.  That's not a good omen.
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Offline rich_t

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Re: China is doing all they can to destroy the US dollar
« Reply #9 on: May 25, 2009, 06:55:11 PM »
Fasten your seatbelts folks...  It's gonna be a very rough ride for the next few years.

I won't go so far as to say that Obama and the current dem controlled congress are intentioanlly undermining our economy.  But their actions are having the effect of it anyway.

You DO NOT raise taxes during a recession. NEVER NEVER NEVER!!!

All that does it make things worse.  The more $$$ that folks are paying in taxes they spend fewer $$$ on things that other people produce/service.  This merely causes companies to lay more people off, thus further reducing the buying $$$ and taxes paid by those just laid off.

I will never fathom why democrats simply don't understand these simple facts.
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Offline The Village Idiot

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Re: China is doing all they can to destroy the US dollar
« Reply #10 on: May 26, 2009, 12:17:25 AM »
we are destroying our own currency. China is trying to replace it as a world currency because they know we are destroying our own currency

Offline Lacarnut

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Re: China is doing all they can to destroy the US dollar
« Reply #11 on: May 27, 2009, 11:18:58 AM »
we are destroying our own currency. China is trying to replace it as a world currency because they know we are destroying our own currency

Correct, as our currency becomes worth less that has the effect of reducing our debt, reducing our buying power and reducing the value of our savings. I think Bernanke and Geithner are planning to flood the market with dollars so that the economy will pick up, when it does inflation will start to set in, interest rates will go up and money will get tight again. Bernanke stated in his book how to get out of a recession. I think this is the plan. 

Offline The Village Idiot

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Re: China is doing all they can to destroy the US dollar
« Reply #12 on: May 27, 2009, 01:05:33 PM »
It has occured to them that buying bonds in US currency might have been a bad idea. Maybe it should have been denominated in gold or something. I think they can forsee the tankerloads of worthless paper currency showing up at the port. I guess they can use it for touilet paper or to burn in their cook stoves