Re: China to nuke US economy with US treasury bonds?

On Aug 10, 8:01 pm, PaPaPeng <PaPaP...@xxxxxxxxx> wrote:
On Thu, 09 Aug 2007 20:37:50 -0700, baldeagle

<botakea...@xxxxxxxxxxxx> wrote:
Advice from China financial officials to their rich friends in
Shanghai are to convert their private holdings of US dollars to Pound
Sterling or the Euros.

This is bullshit. Chinese nationals in China are not allowed to hold
foreign currencies let alone foreign currency accounts. All foreign
currency earned from trade and any other activity has to be sold to
the Central Bank in exchange for the Yuan. They can buy USD, EUROS of
any other foreign currency to pay for their imports. Of course
private citizens will still hold foreign currencies in cash but the
amounts involved are small, not enougfh to worry about exchange rate
movements. If a foreign tourist brings USD cash into China he has
to produce his passport ID in order to change his USD into Yuan for
spending money.

Best dump the $ US ASAP , it wont be worth a thing in a few months
time

Kanga
=====
Gold's value versus money supply

For many years, the dollar was pegged to the gold
standard.Historically increases in the supply of paper money or fiat
currency through increased money supply would cause the demand for
gold to increase. There was a time when gold was money and vice versa.
If citizens felt that there may be insufficient gold to cover the
paper money in circulation, they would queue up at the bank to change
their paper currency back into gold.

However, since the gold standard was ended on August 15, 1971,
governments have been free to print as much money as they choose,
without fear that their populations will come knocking on the central
bank's door demanding to change their paper money back into gold.

In January 1959 US M3 money supply was $288.8 billion [10], and the
official gold reserves of the United States was then 17,335.1 tonnes,
or 557,336,000 ounces [11] (there are 32,150.7 troy ounces in a
tonne). That means that in 1959, there were $518 in circulation for
every ounce of gold reserves held by the USA. Although the theoretical
price should then have been $518 per ounce, the actual price, as fixed
under the gold standard was only $35 an ounce.

By August 2005, the US M3 money supply had risen to $9,873.9 billion,
whilst at the same time the Official Gold Holdings of the United
States had fallen to just 8,133.5 tonnes, or 261.50 million Troy
Ounces [12]. This means that today, in 2005, there are $37,831 in
circulation for every troy ounce of gold held by the United States.

However, this increase of 75 times in the ratio of central bank gold
holdings to debt does not allow for the fact that the gold standard
was abandoned in 1971 and gold holdings have been

.

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