[quote]LIFTICVSMAXIMVS wrote:
Evil1 wrote:
wonder how fast they are going to go about unloading the US$ reserves.
Could be ugly for the value of a dollar.
Well, no – your understanding of cause and effect is backwards. Chinese investors are ditching the dollar because the value of the dollar is already ugly.
They know that the fed is just printing paper which has no value. It is better for them to divest their dollars now while they still can.[/quote]
Can’t the cause and effect on that go either way? If China were motivated to accumulate and then later dump dollars because of a change in perceived long term economic value of the dollar: then the cause would be the over-supply of dollars, and China’s change in policy would be part of a chain of events that starts with an over-supply of dollars. On the other hand, if China were motivated to accumulate and then later dump dollars because of political and/or military strategy using economic forces as a tool: then China’s actions would be a cause in their own right (i.e. intentionally helping Uncle Sam to do himself in).
