Tuesday 7 August 2007

China threatens 'nuclear option' of dollar sales

I like the way they say it "could" cause a dollar crash! More likely, if the Chinese made good on their threat the US would go from first world to third world in a matter of days. The US has a crumbling infrastructure and massive debts, combine this with the fact that the war in Iraq is costing a large fortune and one can easily see the danger. The signs are all there, same as they were in the 1920s and economic collapse is more likely to spur a nation to war than any other factor.

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

Full story...