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Strategies & Market Trends : The coming US dollar crisis
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To: Tadsamillionaire who wrote (1009)9/16/2007 3:31:13 PM
From: RockyBalboa   of 71423
 
Regarding your question I have found the answers numerous times here on SI:

The billions here and there are created from debt
credit cards and bank debt,
agency debt,
municipial and federal treasury debt.

As long as you have willing and repeat buyers for the paper this works without major glitch.
If money goes to china and japan as revenue for goods, banks receiving those funds will put it "someplace", and someplace often included debt issued by US entities.

Of course, some extra current, and not future dollars are created in the process which must be sold. This continues to be a drag to the exchange rate. It is an interesting twist that a debtor nation like the US can "dollarize" a world economy...

We are not at the point where importers of asian goods were required to pay in Euros, literally (or Yen). The process would be a little different then.
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