China Dumping U.S. Dollars

[Phil Fiord]

This is not such a new idea or accusation as info goes back to 2004 and farther it seems, but now there is apparently a proof. Granted, I cannot currently provide a link as this came in a moneynews email I get sent periodically.

The email is in several parts. Part 2 is what I am referring to.

It states the following.

2. China Dumping U.S. Dollars
At the same conference as Bernanke and Trichet, China’s central bank governor Zhou Xiaochuan shelved the academic talk of money supply and instead dropped a bomb on the currency markets.


Zhou announced to the conference that China plans to diversify its $1 trillion in foreign exchange reserves across different currencies, including the euro and pound, and investment instruments, including emerging markets, reports Reuters.


"All central banks are trying to diversify," the People's Bank of China governor said at a conference in Frankfurt. "We have had a very clear diversification plan for several years."
Money News readers will recall that China on Tuesday reported that they have accumulated a record sum of $1 trillion in foreign reserves and reported a record-high trade surplus for October. The country said today that it expects its trade surplus for 2006 to total $150 billion.


Of China’s cash coffers, Money News wrote, "That’s significant because it means that if China decided to sell off any of its reserves by dumping say U.S. dollars on the market and buying gold instead, the dollar’s value would likely tumble."


And that’s exactly what’s happening: China is preparing to sell off some of its dollar reserves so that it can diversify into other currencies and investments.


"[Diversification] includes currencies, investment instruments, including emerging markets," he told Reuters.


The dollar tumbled to a two-month low on the remarks. Gold and other precious metals rallied. However, when Reuters asked if the diversification plan included gold, Zhou said, "That’s a separate thing."


Zhou said that key factors in China’s diversification plan were liquidity, safety, and efficiency.

Likely story...


From 2004 http://www.newsmax.com/archives/arti...10/93410.shtml

China Denies Dumping the U.S. Dollar

NewsMax.com Wires
Friday, Dec. 10, 2004

BEIJING – The agency that maintains China's $540 billion in foreign reserves denied Friday that it had reduced its holdings of U.S. dollar-denominated assets, rejecting what it said were unfounded foreign news reports.

Dollars are believed to account for up to 80 percent of China's foreign reserves.


The dollar's recent plunge prompted China's central bank to boost dollar buying, sparking speculation that Beijing might look to shift some of its reserves to a stronger currency.


"We will not readjust the currency makeup of the foreign exchange reserves simply because of short-term market fluctuations," said a spokesman for the State Administration of Foreign Exchange, quoted by the official Xinhua News Agency.


The spokesman, whose name wasn't given, "denied reports by foreign press that China has reduced large amounts of its foreign exchange reserves in the U.S. dollar, saying that the reports are totally groundless," Xinhua reported.


It didn't specify which foreign news reports it was denying.
A Chinese newspaper reported in November that Beijing was reducing its massive holdings of U.S. Treasury bills because the fall in the dollar was hurting their value.


The article cited Yu Yongding, an adviser to the Chinese central bank's monetary policy committee. Yu later said his comments were based on data from the U.S. Federal Reserve and not any inside knowledge of China's reserve management.




© 2004 Associated Press. All Rights Reserved.

The following is an ad for a book, but the claim is that China had a WTC scenario in its military manual years prior to 9-11-01 and there are numerous notations of OBL.

http://www.newsmaxstore.com/nms/show...ID=885&CatID=1

Unrestricted Warfare:
China's Master Plan to Destroy America

Softcover
ISBN: 0-9716807-2-8


By Colonels Qiao Liang and Wang Xiangsui


Introduction by Al Santoli
As incredible as it may be to believe, three years before the Sept. 11 bombing of the World Trade Center a Chinese military manual titled Unrestricted Warfare touted such an attack – suggesting it would be difficult for the U.S. military to cope with.


Here is an excerpt from Unrestricted Warfare:
“Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency bandwidths understood by the American military...”


Surprisingly, Osama bin Laden is mentioned frequently in this book.
Now NewsMax.com is making the CIA translation of this shocking book available to all Americans.


On Sept. 11, 2001, Americans and the world witnessed one of the most horrific acts ever to take place on American soil.


Our media and government were quick to declare the acts of that day as simply terrorism by a nationless group known as al-Qaeda.


In reading China’s military manual Unrestricted Warfare, you will learn that the events of Sept. 11 were not a random act perpetrated by independent agents.


Instead, Chinese military planners believe that terrorism is just one of the many tools at the hands of nations and their terrorist allies to wage total war against the United States.
You will be surprised to learn:

• The two PLA colonels who authored Unrestricted Warfare have been hailed as heroes in China since Sept. 11
• The Chinese state-run propaganda machine is cashing in on the terror attacks ... producing books, films and video games glorifying the strikes as a humbling blow against an arrogant nation.
• Chinese Communist Party officials are saying that President Jiang Zemin has obsessively and gleefully watched and re-watched pictures of the aircraft crashing into the World Trade Center.
• The CIA’s own translation agency reported that this book identifies the U.S. as China’s main enemy, and details how a weak nation can destroy America using unorthodox attacks – like the 9-11 attacks.
• China is preparing itself and encouraging others to engage the U.S. in total war. The book is chock full of plans and strategies, from using computers, to smuggling illegal immigrants, to manipulating the stock markets, to influencing the U.S. media, to using weapons of mass destruction – all to destroy America.

Recent press reports indicate that China has assisted and continues to assist militarily and economically the Taliban and al-Qaeda – even after Sept. 11.


The doctrine of total war outlined in Unrestricted Warfare clearly demonstrates that the People’s Republic of China is preparing to confront the United States and our allies by conducting “asymmetrical” or multidimensional attacks on almost every aspect of our social, economic and political life.


The media and Congress are keeping a lid on this book because of the implications of U.S.-China economic and trade relations.


Here’s what others say about Unrestricted Warfare:


“You need to read Unrestricted Warfare because it reveals China’s game plan in its coming war with America.. ... China thinks it can destroy America by using these tactics.”
Adm. Thomas Moorer
Former Chairman, Joint Chiefs of Staff


“The 9-11 attacks may just be the beginning. Many terrorist nations and groups will try to imitate this operation … and China’s war book Unrestricted Warfare will be their text.”
Maj. Gen. John K. Singlaub
Former Chief of Staff,
US Forces Korea


“Unrestricted Warfare is evidence linking China to 9-11. It is also their plan for global operations against America.”
Wilson C. Lucom
Endwar.com

interesting, no?

[Phil Fiord]

I just searched www.reuters.com and found some recent articles related to this matter. Whatsay we call this the money bomb, or maybe the econobomb.

Note the Forex item. I have used Forex as a trade company and it is excellent for its type of service, so when they talk money trades, I do understand they know what they are saying.

China's diversification may hit US stocks too
Monday, November 13, 2006 12:32 AM ET

Dollar near recent lows on diversification talk
Sunday, November 12, 2006 8:05 PM ET

Dollar falls again on forex diversification talk
Sunday, November 12, 2006 2:12 PM ET

Dollar soft on China plan to diversify reserves
Thursday, November 09, 2006 11:31 AM ET

Dollar falters after China FX reserve diversify talk
Thursday, November 09, 2006 10:54 PM ET

Dollar slips on talk of China reserves shift
Friday, November 10, 2006 6:39 AM ET

UPDATE 1-China reserve shift includes FX, emerging mkts-Zhou
Thursday, November 09, 2006 7:44 PM ET

[samizdat]

With all that bread, why don't they let their people have babies or dogs for that matter.

I'm no eco-wiz, but a few bucks could be wagered,(for a short while) that the yen will rise as the Japanese stock up on more of China's diversified high tech weaponry( a la clinton).

[Phil Fiord]

samizdat,

It was actually the Red Chinese government that has been recieving the tech and planning an attack on the sleepy giant.

[Phil Fiord]

Just a bit more clarity on this. The Chinese currency is not able to be traded as we might trade US Dollar VS the Euro or Yen, for example. So, the issue with China is not them trading their countries currency, but the money they hold of others that makes their invested holdings wealth, such as the US Dollar. They hold a sizeable sum of US Dollars and if they chose to simply sell it off it could easily make the Dollar plummet.

At one point I was doing currency trades through Forex.com. I was trading various currencies over the short term against each other based on world events and finance news. I liked it.

[samizdat]

It was actually the Red Chinese government that has been recieving the tech and planning an attack on the sleepy giant.

This is only a dormant theory.- China pushed or allowed N. Korea to nuke-test- hoping to build up a new Asian arms race where Japan will rely on Red China as a factory. eco-translation= yen up, up... going, going- Until the eagle no longer flies with the dove (Japan) because the dove is not (gone) Just a theory.

I was trading various currencies over the short term against each other based on world events and finance news. I liked it.

Use thy talents and make friends with money.

[Phil Fiord]

"Use thy talents and make friends with money"

I actually did make a positive return doing forex trading. In the fact that we who frequent message boards like TAA are more intune with world events, it was not so hard to see a future outcome of currencies against each other.

Also, I am sure the quote was a quip, but anyone who would befriend me due to money is no friend of mine.

[samizdat]

Good going. I'm pretty sure you catch the drift of the talent parable. Incidently, I consider currency trading as a great innocent way to be fruitful and multiply. Beats lawyering and "sales". Nothing wrong with sales, per se. My personality is not inclined that way- more toward service. Most of my neighborhood friends were
getting into millions in early twenties- selling those old computers that hardly worked. I was pretty tempted until I understood how they were doing it and how cutthroat it was.

The "quip" is 2part- from 2 parables in the NT. The "use your talents" parable and a lesser known parable about a bad administrator who was about to be called to accounts by the boss, fired (fined etc.) He decided to write off debts to the boss before he got fired so that these people would help him out later, since he was too old or weak to dig ditches, and too proud to beg. The boss had to admit that the bad administrator was wily and shrewd. Jesus explains that the worldly (bad administrator) are more alert, attentive and perserverent than those who work simply for eternal reward. Even so- he comments that we should make friends with money.

I don't understand this parable fully. My interpretation is to forgive the debts of our enemies- those persons who offend us. Secondly- make friends with money by correct generous "alms". Not buying (false) friends in this world, but by feeding the poor, sheltering homeless or giving time to some charitable project. Time is money.

Sometimes I forget small miracles I've seen. Often, I'm depressed at lack of faith, charity and even moderate piety, and the bottlenecked minds that cannot hope, see Christ, read Bible, recognize God as king.

I have never clothed the naked, but once I snuk into the woods to find a drunk on my beat (retired cop) to give him a fur lined jacket. He was one of those 20 year wine whinys- very drunk, possibly very f. cold, maybe freezing. This cost me nothing- it was a deed- no more nor less- not a good deed done in secret. Yet curiously enough, he was dead sober 18 mos. later and thanked me.

So this is an example of how something done in duty, reaped a strange, curious, though feintly remembered reward, albeit 20 years later. Corporal works of mercy, by capitalists- are solvent investments both in the earthly and the heavenly kingdom.

befriend me due to money is no friend of mine.

How true- one can count their fingers on 1 fist. 1 in a thousand is a true friend.

Test a friend.

[Phil Fiord]

Interesting interpretation and indeed a truly selfless deed to one in need.

There are many examples of deeds done for others that are more worthy than money alone. It seems to me we do not see these so much since for news to broadcast about good works is not a means to make a news org profitable.

A friend of mine once expressed her desire for an all good news program. She felt, and I agreed, that if news coverage were to show a balance of more good works it would make the world a better place.

The thing is I later spoke with someone who also thought favorably of this concept and told me that it had been tried - with failure. Failure in the sense that advertisers would not sign on due to low viewership. It seems that bad news sells.

Drive a freeway in any major city and see the traffic slow as people profess to not want to see the gore of an accident - yet cran the neck to see the carnage and later discuss that carnage with cronies at work or play. Bad news sells. It is sad but true.

[samizdat]

A dollar went from 29 to 26 rubles in the last year.

http://www.exchangerate.com/charts.h...cy=239&cid=192

[Phil Fiord]

I received an email from a Money News list I am on that included an AP article and it states that China is looking to heavily invest in gold. Who invests in gold? Usually those who are looking for a safe haven from monetary collapse or are providing a balance in their investments in case other forms of invest should falter.

In this case it appears China may divest from US dollars in favor of gold.

I do not have a link for this article, but here it is:

Report: China to Increase Gold Buying

China will consume a record 350 tons of gold this year amid surging sales of gold bullion, up 17 percent from 2005, the official Xinhua News Agency reported Tuesday.

Gold output in China is likely to top 240 tons this year, with industry profits exceeding 5.5 billion yuan (US$700 million; euro526 million), the report said, citing the chairman of the China Gold Association, Cheng Fumin.

China is the world's third-biggest consumer of gold after India and the United States. Gold use in 2005 exceeded 300 tons, 80 percent of which went to the jewelry industry, the report said.

Cheng said that surging gold prices had dented jewelry sales but were boosting purchases of bullion.

Gold prices surged to a record US$725 an ounce in May but have since fallen back to about US$650 an ounce.

Some economists have been lobbying for China to invest more of its foreign exchange reserves, now thought to top a record US$1 trillion, in gold to hedge against a weaker U.S. dollar. Much of China's reserves are in dollar-denominated Treasuries.

"If China adopts a long-term strategic approach, accurately predicts the market price of gold and purchases gold in a timely and reasonable manner, it can preserve and increase the value of gold," and improve the structure of its reserves, Gao Jie, a professor at the University of International Business and Economics, wrote in a commentary in the online edition of the People's Daily, a Communist Party newspaper.

According to the World Gold Council, China has 600 tons of gold holdings, equivalent to about 19.3 million ounces. Gold accounts for less than 1.3 percent of the country's foreign reserves, according to Gao.

© 2006 Associated Press.

To support the above I searched and found a couple of interesting bits.

http://www.resourceinvestor.com/pebble.asp?relid=27006

...{snip}China Forex Diversification Note
On yet another note, we continue to hear calls for China to diversify its over $1 trillion in forex reserves away from U.S. dollars, this time from Gao Jie, a professor at the (China) University of Business and Economics, who said the Chinese central bank should take advantage of any weakness in bullion prices to shift out of dollars into gold. This, according to a report in the U.K. based Evening Standard.
As the China diversification story gains momentum it may be just a matter of time before other central banks wishing to offload bucks for bullion decide to move now instead of waiting. That begs a fairly important question in this report’s opinion. Which central bank wants to have the distinction of having waited too long to buy their gold? Got any? Gold that is?{snip}

The above Evening Standard report that is noted:
http://www.thisismoney.co.uk/investi...8&in_page_id=3

China gold move puts heat on dollar

Bill Condie, Evening Standard
1 December 2006

Sterling moved within touching distance of $2 today, hitting a fresh 14-year high above $1.97 as the US dollar continued to weaken against the pound, yen and euro.

More weak economic data from the US, notably a lacklustre Chicago Purchasing Management survey, accelerated a slide that has brought the pound within striking distance of $2 for the first time since the financial crisis that culminated in Black Wednesday on 16 September 1992.



More clouds gathered over the US currency in Asia today, after a prominent Chinese economist suggested Beijing should look to shift more reserves into gold. Gao Jie, a professor at the University of Business and Economics, said the Chinese central bank should take advantage of any weaknessin bullion prices to shift more of its $1 trillion (£508bn) in foreign exchange reserves out of dollars.

China caused a stir in the foreign exchange markets about a month ago but raising the prospect of transferring funds out of dollar assets.



At the time Beijing gave no indication of where it might put the reserves. Gold has been widely recommended by Chinese economists and academics, but some officials have aired concerns over its cost.

Thinking on the subject now seems to have turned to timing.




'Gold reserves account for only 1.3% of China's reserve assets, far lower than the 3% level seen in many other countries,' Gao said. 'This is not consistent with China's economic situation.'



Foreign exchange dealers are betting on the US Federal Reserve cutting interest rates in early 2007. That, coinciding with a tightening cycle at the Bank of England and the European Central Bank, has caused the run on the dollar.



• The dollar's slide could leave some London bankers at Goldman Sachs, Lehman Brothers, Morgan Stanley and Bear Stearns earning around 5% less than their peers in the same offices. Bonuses are calculated in dollars then translated into sterling, leaving those who opted for the exchange rate at the close of those banks' financial years - ending this week - worse off than those who opted for an average exchange rate over 12 months.