They are biting the hand that feeds them and greedy corporations could not care any less. All of the China-Mart department stores (Wal-Mart, Target, Best Buy, $1.00 and under stores, etc) want to keep feeding them. I would like to start a chain of All American stores, but I do not have the funding. I would love to see someone else do it if they have the money. Maybe someday I can start one or someone else could. Americans have lost their way and we need to rediscover it. It is time we realize we cannot keep buying goods from those that want to destroy us.


Full disclosure: I am a Wal-Mart stock holder.

China has huge investment securities in the US dollar. Demoting the dollar would also mean losing a big chunk of their investments. Perhaps they surmised that Chinese will survive the spartan way of life, and simply shrug these loses off, while Americans would lose more and suffer more.

Another scenario is that when they devalue the US dollar by dumping their holdings, they would be able to buy some of the states of the USA, thanks to the millions of us who have patronized WalMart and other Chinese products, compounding our trade deficits, more than enough that they would be able to buy portions of the USA.

That 2nd thought is one I had not thought of. Very interesting.

I know of the theory you speak of, the russian prophet. However, I had not thought about it from the currency angle you stated. We have to change ourselves and become leaders of our own companies and local governments. I plan to run for local office with-in the next five years. We need a change from the top down and we need to get ride of career politicians in order to change our country for the better. As anti-tax as I am, I have come up with a theory that companies that import more than 40% of their goods should loose their tax breaks and pay additional taxes in order to stem the issues we have with trade. It just does not make good business sense to do business with those that want to do harm to our country.

Hey... Whats wrong with wally world ? You mean just because the stuff I buy there doesn't work or breaks a week later I shouldn't be happy ?

I don't understand why China would want the USDollar demoted???

China is the biggest foreign creditor of the US Treasury (surpassing Japan) with about $1 Trillion of US Government Debt. Demoting the USD would devalue those assets and that would be stupid on China's part.

Here is an article I read a week ago about China warning the US about reckless spending (a.k.a. stimulus package). The White House is counting on Beijing to help pay for its stimulus package by buying U.S. bonds.

A business professor of mine once said, China and the United States NEED each other. They cannot survive without each other. It's a love/hate relationship.

I agree with you that we should fire most of the corporate CEOs/Executives who got us into this mess (accountability). What makes my blood boil are the very same executives getting bonuses for their incompetence and bad decision-making.

Oh...and by the way, "SORRY" for the harsh language about Wal-Mart months ago. Wal-Mart and the WaltonFamily Fat Cats make my blood boil too


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http://news.yahoo.com/s/ap/20090313/ap_on_bi_ge/as_china_us_economy

China 'worried' about US Treasury holdings
By JOE McDONALD, AP Business Writer Joe Mcdonald, Ap Business Writer – Fri Mar 13, 1:31 pm ET

BEIJING – China's premier didn't say it in so many words, but the implied warning to Washington was blunt: Don't devalue the dollar through reckless spending.

Premier Wen Jiabao's message is unlikely to be misunderstood at the White House. It is counting on Beijing to help pay for its stimulus package by buying U.S. bonds. China already is Washington's biggest foreign creditor, with an estimated $1 trillion in U.S. government debt. A weaker dollar would erode the value of those assets.

"Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said at a news conference Friday after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."

The appeal suggested the outlines of Chinese President Hu Jintao's stance when he meets with President Barack Obama at an April 2 summit in London of the Group of 20 major economies on possible remedies for the global crisis.

Wen gave no indication whether Beijing wants changes in U.S. policy. But economists said his comments reflect fears that higher U.S. budget deficits from Washington's $787 billion stimulus package could drive down the dollar and the value of China's Treasury notes.

"China is telling the U.S. to be careful, not to overspend and keep an eye on the dollar," said Kelvin Lau, regional economist at Standard Chartered in Hong Kong. "There are risks that China cannot control, so they're depending on the U.S. to maintain fiscal prudence and keep the dollar reasonably stable."

Analysts estimate China keeps nearly half of its $2 trillion in foreign currency reserves in U.S. Treasuries and notes issued by other government-affiliated agencies.

"Inside China there has been a lot of debate about whether they should continue to buy Treasuries," said Frank Gong, chief China economist for JP Morgan.

Beijing is trying to increase its leverage at the London G-20 meeting by reminding its partners of its role in financing U.S. spending, Gong said.

"Without China's buying (Treasuries) and continuing to fund U.S. deficit spending, interest rates could have been much higher. That could be very destabilizing in this very recessionary environment," he said. "By attracting a lot of attention to this issue, China is already increasing its influence ahead of the G-20 meeting."

Finance officials from the G-20 meet this weekend. U.S. Treasury Secretary Timothy Geithner is pressing for a new coordinated global stimulus. Japan is supportive but European governments are reluctant to make expensive commitments before they see how current plans are working.

Wen also offered an unqualified defense Friday of his government's policies in Tibet, ignoring questions about a massive security buildup in the Himalayan region.

Tensions have spiked ahead of two key anniversaries this week — the 50th anniversary of a failed Tibetan uprising that sent the Dalai Lama into exile and Saturday's one-year anniversary of violent anti-Chinese riots in Lhasa that sparked the largest protests in decades.

Asked whether the massive security presence pointed to failings in Beijing's policies, Wen said: "The situation in Tibet is on the whole peaceful and stable. The Tibetan people hope to work in peace and stability.

"Tibet's continuous progress (has) proven the policies we have adopted are right," he said.

Wen expressed confidence the world's third-largest economy can meet its official growth target of 8 percent this year and emerge from the crisis "at an early date." But he said Beijing is ready to expand its 4 trillion yuan ($586 billion) stimulus if needed.

"We already have our plans ready to tackle even more difficult times, and to do that we have reserved adequate ammunition," he said. "That means that at any time we can introduce new stimulus policies."

Communist leaders worry about rising job losses and possible unrest amid a trade slump that saw Chinese exports fall 25.7 percent in February from a year earlier. They have promised to spend heavily to create jobs and boost exports.

Chinese bank lending and power demand have risen, suggesting the stimulus is taking effect. But growth in retail sales is weakening, indicating it has yet to spur private sector spending and investment, which analysts say will be key to its success.

Private sector economists expect growth as low as 5 percent this year. That would be the strongest of any major country but could lead to more waves of job cuts.

"I really believe we will be able to walk out of the shadow of the financial crisis at an early date," Wen said. "After this trial, I believe the Chinese economy will show greater vitality."

Wen also said Beijing wants the G-20 summit in April focus on helping the poorest countries.

The premier said Beijing has met its own commitments to help developing countries by erasing a total of $40 billion in debt owed by 46 countries and giving out 200 billion yuan ($29 billion) of aid to developing countries."

"We must see to it that we show concern for developing countries," he said.

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http://news.yahoo.com/s/ap/20090324/ap_on_bi_ge/as_china_global_currency

GreenZ, I'm with you on this conundrum. I am speculating that the Chinese may have come up with a different analysis, if they would find that devaluing the dollar would be to their long term advantage. I can't find the original article where they stated that they'd like to devalue the dollar.

China could be sending the US a subtle message "you borrowed our money and promised to pay us back with interest. You better stabalize your currency and not pay us back with worthless devalued dollars or your days as the international currency of trade are numbered." No one forced the US to borrow from China. Our govt chose to do it to keep from borrowing from US citizen's savings, so they wouldn't have to pay us interest and could keep inflation down.
When I was young, the dollar was worth 4 Deutsch Marks. After the costly Viet Nam war the dollar was devalued. You went to bed one morning and it was half value the next day. Meanwhile the government was plundering Social Security ( what would the fund look like now if the surplus had drawn interest all these years). We are now engaged in two costly wars. The dollar has not been devalued outright but the DM is now the Euro and the dollar is worth about 0.73 euro. Our government just got into your bank account and it's worth 73 cents on the dollar. No wonder Wall Street said let's get in on the act and rob our customers stock accounts.
You may think you're insulated from the decline of the dollar on the international front if you don't travel out of the country, but look at food and gas prices. We need to hold our leadership accountable for their actions and I think a good start would be to force Congress to participate in Medicare and Social Security. If either go broke, they feel it in the pocketbook

Yeah, I was going to say: "man, it sucks to be an American traveling in Europe right now. Our dollar isn't worth much across the Atlantic (against the Euros).

And our Dollar is even worst against the British Pound ( 1 USD = 0.68 GBP )

Ever since the economy took a nose dive, I've been following currencies. I thought I was safe in the Franc, Aussie $, and Yen; but people still viewed the dollar as the safehaven and I lost a bit on my investments. There was also deleveraging going on that caused a lot of people to need dollars. Now I'm finding that there's very few economies that aren't using "Qualitative Easing" (aka printing more money) to keep their economies from collapsing. Right now, what I'm hearing is that the Aussie, Norweigan Krone, and Looney are the safer ones to be in, but who knows for sure. You can't get the experts to agree.

Anyway, if anyone's interested, I subscribe to a good newsletter called the Daily Pfenning http://www.dailypfennig.com/. It has a lot of what seems to be a no nonsense approach to currency investing and absolutely bashes the Fed for what they're doing to destroy the dollar.

Phillip