Dutch Central Bank Sale Announcement Imminent? Message Board

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Politics : Dutch Central Bank Sale Announcement Imminent?

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To: sea_urchin who wrote (21776)	10/28/2004 5:16:30 PM
From: The Wharf	Read Replies (1) of 81050

>>Yes, growth will "cool" from 10% to 9%, or something like that. But why I am confused is because if the Chinese economy contracts, they will have less to invest in US debt instruments. Accordingly, one would expect the USD to fall -- but it didn't happen. So something is wrong somewhere. You confused me as this assumes that the US is tied to China by the peg she is not China is tied to the US but the US is not tied to China. . If Chinas economy falters due to excessive inflation it is her problem and is a plus for the US. Deflation takes place in China and inflation is curbed here. This is not good for people in China. It however reduces the US dollars coming back and increases the future value of those dollars. Debt instruments theoretically should then be worth more. Does this make sense? I think China is in trouble the growth was just to fast and poverty level too large. Her currency due to the peg had too many dollars hitting her market at once. Even a whiff of inflation in her low income nation is too much.

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