{"id":55074,"date":"2020-09-19T06:21:40","date_gmt":"2020-09-19T11:21:40","guid":{"rendered":"https:\/\/olduvai.ca\/?p=55074"},"modified":"2020-09-19T06:21:40","modified_gmt":"2020-09-19T11:21:40","slug":"china-is-killing-the-dollar","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=55074","title":{"rendered":"China is killing the dollar"},"content":{"rendered":"
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China is killing the dollar<\/a><\/h1>\n
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In the wake of the Fed\u2019s promise of 23 March to print money without limit in order to rescue the covid-stricken US economy, China changed its policy of importing industrial materials to a more aggressive stance. In examining the rationale behind this move, this article concludes that while there are sound geopolitical reasons behind it the monetary effect will be to drive down the dollar\u2019s purchasing power, and that this is already happening. More recently, a veiled threat has emerged that China could dump all her US Treasury and agency bonds if the relationship with America deteriorates further. This appears to be a cover for China to reduce her dollar exposure more aggressively. The consequences are a primal threat to the Fed\u2019s policy of escalating monetary policy while maintaining the dollar\u2019s status in the foreign exchanges.<\/em>
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Introduction<\/strong><\/p>\n

On 3 September, China\u2019s state-owned\u00a0Global Times<\/em>, which acts as the government\u2019s mouthpiece, ran a front-page article warning that<\/p>\n

“China will gradually decrease its holdings of US debt to about $800billion under normal circumstances. But of course, China might sell all of its US bonds in an extreme case, like a military conflict,” Xi Junyang, a professor at the Shanghai University of Finance and Economics told the Global Times on Thursday\u201d[i]<\/a>.<\/p>\n

Do not be misled by the attribution to a seemingly independent Chinese professor: it would not have been the front page article unless it was sanctioned by the Chinese government. While China has already taken the top off its US Treasury holdings, the announcement (for that is what it amounts to) that China is prepared to escalate the financial war against America is very serious. The message should be clear: China is prepared to collapse the US Treasury market. In the past, apologists for the US Government have said that China has no one to buy its entire holding.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

China is killing the dollar In the wake of the Fed\u2019s promise of 23 March to print money without limit in order to rescue the covid-stricken US economy, China changed its policy of importing industrial materials to a more aggressive stance. In examining the rationale behind this move, this article concludes that while there are […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[7772,130,303,6390,13061,538,827,839,3650],"class_list":["post-55074","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-alasdair-macleod","tag-china","tag-fed","tag-global-times","tag-goldmoney-insights","tag-money-printing","tag-united-states","tag-us-dollar","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/55074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=55074"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/55074\/revisions"}],"predecessor-version":[{"id":55075,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/55074\/revisions\/55075"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=55074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=55074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=55074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}