SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Foreign Affairs Discussion Group
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: neolib who wrote (169307)8/18/2005 3:39:40 PM
From: Sun Tzu  Read Replies (2) of 281500
 
You have not answered the question. Treasuries still boil down to even more dollars. I am trying to get to the mechanics of the part where you get to explain how the dollar is worth more than the paper it is printed on. For the rest of the world, their currency has value because it is a kind of IOU that says I will give you more hard goods if you give me back the currency. But US runs a chronic trade deficit, so this is not the case for USD.

My contention is that in fact they are not extending us the credit. Rather China is relatively comfortable keeping the dollars because it knows it can use it to buy goods, such as oil, from other countries. So the risk is spread. However, given that US has been having such a huge trade deficit for so long, this has become nothing more than a game of musical chairs. At some point in time those holding the dollar bag will be very sorry.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News