On Thu, Oct 08, 2009 at 04:26:39PM +0530, Kiran K Karthikeyan wrote: > The problem that China faces is that with its $200 billion trade surplus > with the US, and most of the foreign direct investment into China being in > $, and the fact that it doesn't want to devalue its own currency means it > has to keep buying $ to keep it at its current level. If the current trend > continues, it will be sitting on 2 trillion dollars soon, and with all the > money poured into stimulus packages would mean a significant downward > pressure on the dollar and consequently their then 2 trillion would be worth > much less.
The dilemma is about cutting your losses, and there are plenty of nervous poker players observing each other very, very carefully. That the USD will lose the reserve currency status soon has been clear for many years. The jury is out on how quickly it happens, and what will be the outcome, and the alternative. Many propose a currency basket, it would be probably more sensible to use a resource basket instead. In fact, that's probably how money should be redefined. Oh, and I'm still working on the pirate party program: http://eugen.leitl.org/pirateprogram.txt and could use some input. -- Eugen* Leitl <a href="http://leitl.org";>leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE
