China Has Major US Dollar Reserves That It Can Cash In
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China threatens ‘nuclear option’ of dollar sales
By Ambrose Evans-Pritchard
Last Updated: 9:54am BST 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.
It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.
Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing’s foreign reserves should be used as a “bargaining chip” in talks with the US…
Simon Derrick, a currency strategist at the Bank of New York Mellon, said the comments were a message to the US Senate as Capitol Hill prepares legislation for the Autumn session.
“The words are alarming and unambiguous. This carries a clear political threat and could have very serious consequences at a time when the credit markets are already afraid of contagion from the subprime troubles,” he said. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml
While I do not believe that China will dump its dollar holdings at this time, I have long felt that China’s US dollar reserves will be a factor in its goal of having closer unity with Taiwan.
Irrespective of the role that China may play in the future regarding the US dollar, eventually, if my understanding of Old Testament prophecy in this area is correct, the US dollar will collapse.
Here are two scriptures that support this view from Habakkuk 2:
6 “Will not all these take up a proverb against him,
And a taunting riddle against him, and say,
‘Woe to him who increases
What is not his–how long?
And to him who loads himself with many pledges’?
7 Will not your creditors rise up suddenly?
Will they not awaken who oppress you?
And you will become their booty.
Some articles of possibly related interest may include:
China, Its Biblical Past and Future, Part 1: Genesis and Chinese Characters This article provides information showing that the Chinese peoples must have known about various accounts in the Book of Genesis up until their dispersion after the Tower of Babel.
China, Its Biblical Past and Future, Part 2: The Sabbath and Some of God’s Witness in China When did Christianity first come to China? And is there early evidence that they observed the seventh day sabbath?
China, Its Biblical Past and Future, Part 3: China in Prophecy What is Ahead for China? What will happen to nearly all the Chinese?
Europa, the Beast, and the Book of Revelation discusses the largest church since the second/third century, which will ultimately eliminate the USA and its allies such as Australia, New Zealand, Canada, and Great Britain.
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