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Thread: China Increases Reliance on U.S. Dollar

  1. #1

    China Increases Reliance on U.S. Dollar

    Chinese Dollar Borrowing Rises Above $200 Billion in 2019.
    https://smaulgld.com/china-increases...on-u-s-dollar/

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  3. #2
    China would never adopt a truly decentralized currency. CCP requires total control.

    Recently watched a Keynote with Peter Zeihan. He gives a pretty coherent model of the current state of geopolitics and into the near future. He is pretty bearish on Germany and China and identifies them as as the two biggest losers in the coming decades. China specifically for many of the reasons you're echoing.

  4. #3
    Quote Originally Posted by ammodotcom View Post
    China would never adopt a truly decentralized currency. CCP requires total control.

    Recently watched a Keynote with Peter Zeihan. He gives a pretty coherent model of the current state of geopolitics and into the near future. He is pretty bearish on Germany and China and identifies them as as the two biggest losers in the coming decades. China specifically for many of the reasons you're echoing.
    China is not as formidable as people make them out to be- BECAUSE of their reliance on central planning and debt
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  5. #4
    Quote Originally Posted by Smaulgld View Post
    China is not as formidable as people make them out to be- BECAUSE of their reliance on central planning and debt
    They are about to collapse because of it.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  6. #5
    There's a lot of dollar-denominated debt in China.

    Quote Originally Posted by ammodotcom View Post
    China would never adopt a truly decentralized currency.
    They won't adopt a gold standard domestically, but the idea of using gold for international transactions to bypass the dollar isn't farfetched.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  7. #6
    Quote Originally Posted by r3volution 3.0 View Post
    There's a lot of dollar-denominated debt in China.
    And it's going to destroy them as their own currency loses value.



    Quote Originally Posted by r3volution 3.0 View Post
    They won't adopt a gold standard domestically, but the idea of using gold for international transactions to bypass the dollar isn't farfetched.
    It is for them.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  8. #7
    Quote Originally Posted by Swordsmyth View Post
    It is for them.
    You mean it's for their benefit? Well duh, why else would they do it?

    The point is that America's ability to tax the rest of world by monetary means to finance its welfare state may be coming to an end.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  9. #8
    Quote Originally Posted by r3volution 3.0 View Post
    You mean it's for their benefit? Well duh, why else would they do it?

    The point is that America's ability to tax the rest of world by monetary means to finance its welfare state may be coming to an end.
    I mean it's farfetched for them.

    They can't afford it, they will lose all their gold either paying to import food or to theft by corrupt party officials.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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  11. #9
    Quote Originally Posted by Swordsmyth View Post
    I mean it's farfetched for them.

    They can't afford it, they will lose all their gold either paying to import food or to theft by corrupt party officials.
    Not yet
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  12. #10
    Quote Originally Posted by Swordsmyth View Post
    I mean it's farfetched for them.

    They can't afford it, they will lose all their gold either paying to import food or to theft by corrupt party officials.
    China already has trade agreements to import food products from other countries, such as Brazilian soybeans, and no, the agreements don't require gold payments. Gold-backed digital currency soon perhaps but not literally shipping gold to Brazil for soybeans or shipping gold to Russia for oil.

    Good lord. The stuff you come up with sometimes....
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

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  13. #11
    Quote Originally Posted by devil21 View Post
    China already has trade agreements to import food products from other countries, such as Brazilian soybeans, and no, the agreements don't require gold payments. Gold-backed digital currency soon perhaps but not literally shipping gold to Brazil for soybeans or shipping gold to Russia for oil.

    Good lord. The stuff you come up with sometimes....
    They pay other countries in dollars right now but they are going to run out of those and nobody wants their currency, if they start to pay in a gold backed currency other countries are going to quickly drain their gold reserves, and if they won't ship the gold nobody will want their "gold backed" currency.

    The stuff you come up with sometimes....
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  14. #12
    Quote Originally Posted by Swordsmyth View Post
    They pay other countries in dollars right now but they are going to run out of those and nobody wants their currency, if they start to pay in a gold backed currency other countries are going to quickly drain their gold reserves, and if they won't ship the gold nobody will want their "gold backed" currency.

    The stuff you come up with sometimes....
    You sure about that? You sure you want to stick with that?

    You really do just make it up completely as you go along. The fact that China has inked trade agreements with Brazil, for example, in their respective national currencies is easily verified by 3 seconds of web search.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  15. #13
    Quote Originally Posted by Swordsmyth View Post
    They pay other countries in dollars right now but they are going to run out of those and nobody wants their currency, if they start to pay in a gold backed currency other countries are going to quickly drain their gold reserves, and if they won't ship the gold nobody will want their "gold backed" currency.

    The stuff you come up with sometimes....
    What countries have currencies currently backed by gold?
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    Quote Originally Posted by Swordsmyth View Post
    Yes, that is the new tactic from all the trolls.
    They just assert lies over and over no matter how often they are exposed.
    I am Zippy and I approve of this post. But you don't have to.

  16. #14
    Quote Originally Posted by devil21 View Post
    You sure about that? You sure you want to stick with that?

    You really do just make it up completely as you go along. The fact that China has inked trade agreements with Brazil, for example, in their respective national currencies is easily verified by 3 seconds of web search.
    There are a few exceptions but that is what they are and will remain.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  17. #15
    China issuing dollar bonds can be for multiple reasons. A common reason that sovereigns issue foreign currency bonds, aka borrowing in foreign currencies, is pure derivative speculation, hoping to profit in currency terms from movements in the foreign currency to domestic currency ratio. Perhaps China is making a huge bet on a dollar devaluation? After a dollar devaluation, they'd enter a currency swap agreement to exchange the dollars back out for a different currency and lock in the currency profit. Any way, point is that dollar borrowing doesn't mean China is relying on the dollar for any domestic operations in dollars. This kind of stuff is the bread-n-butter of derivatives speculation.
    Last edited by devil21; Yesterday at 01:05 AM.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  18. #16
    Quote Originally Posted by devil21 View Post
    China issuing dollar bonds can be for multiple reasons. A common reason that sovereigns issue foreign currency bonds, aka borrowing in foreign currencies, is pure derivative speculation, hoping to profit in currency terms from movements in the foreign currency to domestic currency ratio. Perhaps China is making a huge bet on a dollar devaluation? After a dollar devaluation, they'd enter a currency swap agreement to exchange the dollars back out for a different currency and lock in the currency profit. Any way, point is that dollar borrowing doesn't mean China is relying on the dollar for any domestic operations in dollars. This kind of stuff is the bread-n-butter of derivatives speculation.
    Keeping money in dollars helps keep their currency from rising vs the dollar which would make their exports even more expensive than the tariffs made them.

    As for currency swaps, the US does not have any swap agreements with China. The ECB does but that would be done in Euros.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    Quote Originally Posted by Swordsmyth View Post
    Yes, that is the new tactic from all the trolls.
    They just assert lies over and over no matter how often they are exposed.
    I am Zippy and I approve of this post. But you don't have to.



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  20. #17
    Quote Originally Posted by Zippyjuan View Post
    Keeping money in dollars helps keep their currency from rising vs the dollar which would make their exports even more expensive than the tariffs made them.

    As for currency swaps, the US does not have any swap agreements with China. The ECB does but that would be done in Euros.
    Swap agreements can be made with any holder of a currency, not just "the US" (whatever that means). Any entity holding dollars or yuan or whatever can enter a swap. I don't know if that's what they're doing, just pointing out that it is possible that pure currency speculation via derivatives can be a reason. I've mentioned before that the Chinese have been quietly pledging T issues for dollar "loans", which they aren't paying back, and presumably are using to fund purchases here, though you won't find that publicized anywhere. There's a lot going on behind the scenes.
    Last edited by devil21; Yesterday at 10:24 AM.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals



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