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

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To: bond_bubble who wrote (48179)	12/26/2005 12:45:50 PM
From: ild	Read Replies (3) of 110194

BB, very good post. <<<The only other way is to spend the USD savings they are currently holding!! i.e the foreigners spend the dollar more acquiring raw materials like OIL>>> As I understand the ONLY way for foreigners to spend their USD savings is to buy some the US produced stuff or services. China already tried to buy Unocal and was refused. Using USD to buy stuff from other countries just moves hot potato USDs to another country. What that means is that China and Japan will in fact lose the capital they invested in US treasuries. Small countries will be able to dump their US holdings while China and Japan are trying to support the USD to sustain their export to the US. But, as you said, the USD will eventually fall and the foreigners will lose their capital invested in the US treasuries.

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