Chinese Democracy

[faqcya]

I was wondering if someone with a little more knowledge about forex then myself might fill me with a little wisdom here.
Ok on 11/7 In Asia a Chinese politician mentioned redistributing their large array of US held money. This made the $ plummet. Which I'm sure that he knew this would be the reaction. Now they've held these dollars for a long time now and they could have sold them a long time ago and received much more on their investment if they sold them a long time ago. So I sit here and wonder what are the possibilities that he was bluffing and since he knew what the reaction to his statements would be hes only setting up the market so instead of selling dollars cheaply they are planning to buy more dollars cheaply. If China actually sold all of their US dollars that they currently hold they would seriously cripple the US economy. OK Communism kills Democracy, but they aren't stupid if they kill the US economy there will be serious repercussions upon their own economy because the US is one of the largest importers of Chinese goods. Just like if they threw Nukes at the US the fallout would make its way back to China. And there will also be serious repercussion on every other country in the world. I better stop here because i am envisioning WW3.

[chensi17]

hi~ there.... i dont think Chinese govornment is trying to push the USD down. Coz if the USD down too much, the appreciate Chinese yuan will has a negtive impact on export and also blow the "buble" even bigger in China... Since FED declines the interest rate, this will impact the space that China increase its interest rate which lets Bank of China in a awkward situation because China wantsto use tighten monetry policy since the increased inflation expectation and over heated economy. The slowing of US economy is mainly caused by sub-prime loans... not because of selling USD.

[priest9]

Hi,

I think the Chinese government is trying to dumb their dollars over time (5-10 years) so that USA economy will seriously slow down and the EUR will become the "Index" valuta. China would like for the EU to become more powerfull than the USA because the EU is very passive...