China Continuing to Stab Us in the Back
Posted by Joshua Price on November 8, 2007
There’s more great news out today from our wonderful lopsided trading partner China (you know, that country that continues to export hazardous goods into our country).
This is from today’s Washington Times:
China roiled financial markets around the globe yesterday when it asserted that the dollar is losing its luster as the world’s reserve currency and that Beijing will swap some of its $1.4 trillion in reserves out of U.S. dollars into stronger currencies like the euro and Canadian dollar.
China’s verbal assault on the dollar helped trigger a 360-point plunge in the Dow Jones Industrial Average and came as French President Nicolas Sarkozy warned in a speech to Congress that the “disarray” caused by the dollar’s steep fall could lead to “economic war.”
“The world’s currency structure has changed,” Xu Jian, a central bank vice director, said in a Beijing conference, according to wire service reports. The dollar is “losing its status as the world currency,” he said.
“We will favor stronger currencies over weaker ones, and will readjust accordingly,” Cheng Siwei, vice chairman of China’s National People’s Congress, said at the same meeting.
Now here’s the real sobering part:
With the world’s largest reserves of dollars, China has been a major investor in U.S. Treasury bonds and debt securities and is the second-largest holder of U.S. government debt next to Japan. China accumulates a lot of dollars because of its lopsided trade surpluses with the United States and its policy of linking its currency to the dollar, which requires it to buy and hold dollars.
Well here is the price we’re paying for our seemingly wide open trading policy with China. This is what you get when you openly trade with a communist country that, shockingly, has banned the Bible for 2008 Summer Olympic participants. But just remember, China is moving towards a more democratic, freer society and economy. Right. Keep telling yourselves that while China continues to amass the world’s largest army and economy.