There’s been some discussion over the last few days of what is going to happen if China starts reducing its position in US Treasuries. Seeking Alpha has a good summation of the problem:
“In response, during a recent summit, the leaders of Brazil, Russia, India, China and South Africa (the BRICS) announced that they want to trade between themselves in their own currencies. This comes amid a growing chorus in China pushing for a limit of dollar reserves to $1.3 trillion.”
If you enjoy the content at iBankCoin, please follow us on Twitter
If anyone’s taking China seriously, they should stop. Dumping 2/3 of their dollars is not a viable recourse for China. If they think they legitimately believe otherwise, they’re in for a world of hurt.
Viva Fiat!
well that is not in question….a continued lightening up on dollar reserves coupled with more intense investment in hard assets is a worrisome problem.
I’m not worried at all. For the near present future, China’s fate is tied to ours. End of story. All of China’s rhetoric isn’t necessarily aimed at Bernanke. I tend to think it’s fodder for the morons on Capitol Hill in charge of the national debt. China’s not nearly as worried about the QE iterations as they are about Washington’s stupidity. And quite frankly, I wholeheartedly agree with them.