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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: bond_bubble who wrote (56885)3/26/2006 3:44:09 PM
From: mishedlo  Read Replies (1) of 110194
 
If China were to allow free floating, then there will be lot of $ departing from China and China will be providing these $s from their reserve holding. Do you think the retreating $ amount is more than the Chinese reserve holding? I dont think so.

I do not think so either.
Perhaps you remember my debate attempt with Roubini.
There was all this talk (right at the very bottom of the US$ of course), telling China to dump its treasuries and its reserves.

I took the other side of that debate and said China should hold them.
Not only would dumping those dollars been the wrong thing to do (look at the runup in the US$) it would have opened China to a severe headache of capital flight with no reserves.

So far I think China has played this perfectly.

Mish
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