The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Jim Willie CB who wrote (724)	9/12/2003 4:43:19 PM
From: mishedlo	Read Replies (1) of 110194

From dailyreckoning.com. Comments? To wit: China is planning to issue dollar and Euro-denominated government bonds. Now this, to me, cowering in my reinforced-steel bunker, is proof positive of how the Chinese are smarter than we are, and that is why they ARE going to eat our lunch. The plan is simplicity itself. The yuan is currently pegged at 8.3 to the dollar. They issue these dollar-denominated bonds, and get 8.3 yuan for each dollar that somebody invests in these bonds. Then they de-peg the yuan from the dollar. The dollar plunges in value, and now they have a lot of debt where they got 8.3 yuan that they can now literally pay back at pennies on the yuan!

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