WTF? China threatens ‘nuclear option’ of dollar sales
Posted by thebosun on August 7, 2007
We better reevaluate our Chinese relationship ASAP and shore up our finances. Sure is beginning to sound like we have screwed ourselves through greed, corruption, and piss poor business sense decisions. R/ Bosun
Courtesy of the UK Telegraph, Britain’s No.1 quality newspaper website
By Ambrose Evans-Pritchard
08/08/2007 – The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.
Two officials at leading Communist Party bodies have given interviews in recent days warning – for the first time – that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.
Described as China’s “nuclear option” in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.