China’s diversification won’t hurt dollar, says Wen

[Warren Stupidity]

MAR 16: China, the second-largest overseas holder of Treasuries, said diversification of its $1.07 trillion currency reserves won’t cause a slump in US securities. “Our purchases of US dollar assets are mutually beneficial,’’ Prime Minister Wen Jiabao said at a press conference after the annual meeting of China’s legislature in Beijing. The establishment of a new agency to help manage the reserves “won’t affect the value of the U.S. dollar assets.’’

China, which lifted Treasury holdings by $4 billion to $353.6 billion in January, plans to set up an agency to seek higher returns on its reserves and invest in companies in a similar way to Singapore’s Temasek Holdings Pte. The dollar slumped 1% against the euro in the week ended November 11 after central bank governor Zhou Xiaochuan said he plans to diversify the world’s biggest currency reserves.

http://www.financialexpress.com/fe_full_story.php?content_id=158088

And so it begins.

[Commie Pinko Dirtbag]

1. Translation: "there's no way in hell we'll be able to sell all this toilet paper in one fell swoop."

"and we'll lose money over this, and we're mad. But you're fucked."

[Warren Stupidity]

3. That would be my assesment. nt.

[VegasWolf]

2. Exactly, the bush Administration's weak dollar philosophy crippled the USD all by itself. nt

[NYC]

4. To prevent this, won't the U.S. raise interest rates?

?

[1932]

5. US would still have to come up with money to pay the higher rates.

We could do it by raising taxes, but is there the political will to raise taxes on the rich? As for getting it from working people, there's only so much you can take from middle class people before the get worn out.

[AndyTiedye]

6. Through the Roof

Without China funding our debt, we'll have to pay double-digit interest rates.