bladerunner
Banned Idiot
My interpretation of Delberts statement, is that a huge proportion Of Chinas 2Trillion surplus is held in US Dollar denominated debt
Resource War/Financial Woes
- Thread starter Delbert
- Start date
Roger604
Senior Member
My understanding is that total reserves are 2+ trillion, most of which are dollar denominated. T-bills, T-notes, T-bonds are a smaller proportion of this (~700 billion).
The real number is not transparent. It's entirely possible that China has diversified a significant chunk of this into commodities or other assets. Notice that they passed up the purchase of a large quantity of gold from IMF, that Indian snapped up instead.
bladerunner
Banned Idiot
Do you think that was a smart move?
There are other US dollar denominated assets like agency bonds, corporate bonds, muni bonds and all mortgage securities that China invest in also. They invested 700 billion in US treasury and the remaining in the other asset classes.
Their total reserve should be even more, I think about 2/3 are in USD, although this changes since USD is hitting new lows every day.
that was the stupidest thing China have done. They overbid for oil and iron ore around the world. And when they actually get to exchange some of that trash fiat money for gold, they are like "hmm, we can get it for cheaper from our domestic producers". Well, you can buy cheaper from your domestic producers and also buy from IMF. How can you have too much gold in this day and age? The head of Chinese Sovereign wealth fund should be put in prison for treason.
They should understand Gold is not dropping below $1000 for an extended period of time ever again. Everyone knows that China will come in to buy on the dips, so they can feel confident in buying if Gold ever dips below $1000.
bladerunner
Banned Idiot
I heard in a interview with one of the gold mining companies that gold is expected to reach $1200 by december and $1500 during 2010, because of the falling value of the US Dollar.
RedMercury
Junior Member
Of course, that source would be completely unbiased 
However, I tend to agree.
However, I tend to agree.The US dollar was just as good as a fiat money.
The only thing that provides the US dollars strength was it is being used as a major world currency.
But I tell you, if people start dumping dollars and uses other currencies like Euro, etc. US dollar will surely collapse, and the collapse of US economy is inevitable.
The only thing that provides the US dollars strength was it is being used as a major world currency.
But I tell you, if people start dumping dollars and uses other currencies like Euro, etc. US dollar will surely collapse, and the collapse of US economy is inevitable.
bladerunner
Banned Idiot
I dont think its in anybodys interest, moreso China to see the collapse of the US economy, so why arent we thinking of more ways for the U.S. to prevent this from happening?
bladerunner
Banned Idiot
The bits Ive highlighted will have Chanos smiling. Perhaps he is in cahoots with Goss and now they are trying to short the market.
Bill Gross: Major China Bubble Emerging
Monday, November 23, 2009 3:43 PM
By: Gene J. Koprowski Article Font Size
The investment guru who runs the world’s biggest bond fund at Pimco, Bill Gross, says a speculative bubble is emerging in China.
Real economic growth there is still constrained by limited consumer demand from the United States and other trading partners
Gross told Bloomberg News that the Chinese will have “a bubble of their own” to confront shortly.
“It’s gearing up for export that doesn’t find an end consumer, that’s the real problem in China.”
Constrained growth potential in the United States will be the “new normal” for a while, Gross contends.
“With U.S. unemployment in the double digits and likely to stay close to that for the next six months despite job creation ahead, the Fed has nowhere to go,” Gross says.
China’s trade surplus with the United States nearly doubled in October from the previous month to $24 billion, figures from the Customs Bureau show.
The Shanghai Composite Index of shares has returned 84 percent so far this year. The index is valued at 35 times reported earnings, more than doubling in a year.
This is unsustainable, notes Gross.
The “systemic risk” of another asset bubble is rising, in part because the Federal Reserve has kept interest rates at record lows.
What’s more, there are other, potentially difficult developments.
“China may abandon its dollar peg within six months’ time and with it, its own easy monetary policy that has fostered more significant mini-bubbles of lending and asset appreciation on the Chinese mainland,” Gross adds.
Bloomberg News also reports that China's government has encouraged a $1.3 trillion credit boom this year to complement its monetary and fiscal stimulus, which is raising concern internationally about future economic instability there.
The Organization for Economic Cooperation and Development (OECD) also is raising red flags about the burgeoning Chinese bubble.
© 2009 Newsmax. All rights reserved.
Bill Gross: Major China Bubble Emerging
Monday, November 23, 2009 3:43 PM
By: Gene J. Koprowski Article Font Size
The investment guru who runs the world’s biggest bond fund at Pimco, Bill Gross, says a speculative bubble is emerging in China.
Real economic growth there is still constrained by limited consumer demand from the United States and other trading partners
Gross told Bloomberg News that the Chinese will have “a bubble of their own” to confront shortly.
“It’s gearing up for export that doesn’t find an end consumer, that’s the real problem in China.”
Constrained growth potential in the United States will be the “new normal” for a while, Gross contends.
“With U.S. unemployment in the double digits and likely to stay close to that for the next six months despite job creation ahead, the Fed has nowhere to go,” Gross says.
China’s trade surplus with the United States nearly doubled in October from the previous month to $24 billion, figures from the Customs Bureau show.
The Shanghai Composite Index of shares has returned 84 percent so far this year. The index is valued at 35 times reported earnings, more than doubling in a year.
This is unsustainable, notes Gross.
The “systemic risk” of another asset bubble is rising, in part because the Federal Reserve has kept interest rates at record lows.
What’s more, there are other, potentially difficult developments.
“China may abandon its dollar peg within six months’ time and with it, its own easy monetary policy that has fostered more significant mini-bubbles of lending and asset appreciation on the Chinese mainland,” Gross adds.
Bloomberg News also reports that China's government has encouraged a $1.3 trillion credit boom this year to complement its monetary and fiscal stimulus, which is raising concern internationally about future economic instability there.
The Organization for Economic Cooperation and Development (OECD) also is raising red flags about the burgeoning Chinese bubble.
© 2009 Newsmax. All rights reserved.
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