Quote:
Originally Posted by quantum-x
Here's the thing: If China dumps 1.4trillion USD, the currency is going to take a fucking HUGE hit. That's the summary. Yes, if you live in the USD, 1$ == 1$, but when imports start costing more and inflation sets in, the $1 from 2007 will not each $1 in 2009  |
Doubt China would "dump" as such - they have good biz sense and there are other ways of "dumping" without causing so much damage.
Who knows, but also doubt they are thinking short-term either - there is nothing so far to think China is planning short-term. They are still laying down the infrastructure to enhance their exports globally and investing heavily in this - everything from the Panama Canal to "gifts" to other nations to construct/speedup construction of roads from dock areas (for their product of course
)
The economic thing is prob more along the lines of just gradually balancing their currency reserves - makes sense, tho there could be fractional hits on the dollar despite that.