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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (13906)	5/19/2009 2:00:35 PM
From: grusum	Respond to of 24758

the US dollar is on the verge of becoming the world's hottest hot potato.

To: ahhaha who wrote (13906)	5/19/2009 4:59:51 PM
From: rich evans	Read Replies (1) \| Respond to of 24758

Since our current account deficit must equal our capital account surplus, it makes no difference what China and Brazil do. And it makes no difference what China does with its dollars- that is buy oil, commodities with them. Eventually these dollars must come back the US and get invested somewhere. And this investment helps make up for our huge budget deficits which detract from national savings and investment. Less chinese investment in US recently is because the trade deficit has decreased from 60bill a month to 20bill a month. Not sure about Chinese share. But our saving rate has gone up I read to 5% which makes up for the reduction in the imported capital account surplus. The chinese/brazil deal has no effect on us and is small potatoes compared to our imports of almost 2.8 trill dollars in goods a year and our exports of over 2 trill. Don't worry be happy. Rich

To: ahhaha who wrote (13906)	5/19/2009 5:04:27 PM
From: frankw1900	Read Replies (1) \| Respond to of 24758

What we are talking about now is Brazil paying for Chinese goods with reals and China paying for Brazilian goods with renminbi I've always thought US dollar is used for trade because its everywhere in large quantities and and US economy behaved reliably enough that other currencies could be measured against $US. If US economy stops behaving reliably enough then there is really nothing to stop other currencies from being used instead, if they are available in reasonable quantities and the economies behind them behave reliably enough. Brazil and China sell enough stuff to each other that there should be a market for each others' currencies. My question is why do the central bankers have to meet about it? Henrique Meirelles and Zhou Xiaochuan, governors of the two countries' central banks, were expected to meet soon to discuss the matter, the official said.