The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: Real Man who wrote (883)	9/8/2007 8:33:19 PM
From: stan_hughes	Read Replies (1) of 71419

So maybe there's some substance to that China stuff I mentioned Thursday morning after all -- Message 23858167 Still, $48 billion is a long way from $1.3 trillion -- the beginning of a dam burst? I'm currently thinking maybe not. Why? Because the Chinese are a lot of things, but they're far from being stupid -- as such, I'll bet they're already up to their eyeballs short the USD in various derivatives and swaps, and therefore won't feel much more pain on the way down from this point. If correct, the only thing that should matter to them going forward is finding enough recurring bid size to take the paper off their hands, and then being able to close out any offsetting existing hedges as they go. With the kind of numbers we're talking about, the absorption process will be slow -- a chunk here and a chunk there (the numbers you cite are ~$10 billion per week = perhaps manageable). That should make for a long unwind, hence we may not get that big waterfall drop that a lot of people seem to be looking for -- BWTFDIK, the PRC never sent me the memo .

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