China threatens 'nuclear option' of dollar sales

[The once and future king]

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At some point China's internal market is going to mature. Then it wont need to exports so much to keep its economy going.

Then it can exercise this option at its leisure.

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Not necessarily true. Japan's economy is certainly mature and they are still heavily dependent on exports. The U.S. & China are going to be dysfunctionally co-dependent for the forseeable future.

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Does Japan have an internal market of 1 billion people? 1 in every 6 people on earth are part of China's internal economy. China could have the largest economy in the world and never export a thing.

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And why is it that they don't already, and if they lose the US market due to their own obstinance, what makes you think they wont return to the policies that put them so far behind to start with?

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I said "at some point" meaning that at some point in the future China's internal economy will be mature. At this point .e.g. NOT NOW it can pull the nuclear dollar trigger with much less fear of catching radiation sickness from the fall out.

Unlike Japan of course which will allways need external markets because its internal market isnt comprised of 1 in 6 people on the planet.

[Copernicus]

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At some point China's internal market is going to mature. Then it wont need to exports so much to keep its economy going.

Then it can exercise this option at its leisure.

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Not necessarily true. Japan's economy is certainly mature and they are still heavily dependent on exports. The U.S. & China are going to be dysfunctionally co-dependent for the forseeable future.

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Does Japan have an internal market of 1 billion people? 1 in every 6 people on earth are part of China's internal economy. China could have the largest economy in the world and never export a thing.

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And why is it that they don't already, and if they lose the US market due to their own obstinance, what makes you think they wont return to the policies that put them so far behind to start with?

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I said "at some point" meaning that at some point in the future China's internal economy will be mature. At this point .e.g. NOT NOW it can pull the nuclear dollar trigger with much less fear of catching radiation sickness from the fall out.



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If their economy has matured to the point where they can afford total isolationism the health of their economy will still be based on growth, as ours is. There will never be a point where businesses can suddently turn isolationist and continue to grow.

The US certainly is a market with critical mass. We don't NEED German and Japanese cars, we don't NEED fruit from Chile, we can build our own Ipod's quite well if we had to. Despite that we would never shut down our trade partners because the reduction in the economy would take decades to recover from.

China would have an even more severe problem because of their size and diversity of trading partners (assuming we don't bully them into eschewing trade with the Axis of Evil first).

We've got much more severe problems to face from within for the next decade than China going "economic nuclear".

[The once and future king]

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If their economy has matured to the point where they can afford total isolationism

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Since when does China selling of its dollar reserves and crippling the American economy = Total isolationism.

[morphball]

LOL you scaremongers. China is a least a decade away from being able to do this. Hint - When China gets extra dollars, they print yuan for each one and give those to its citizens. If the dollar crashes, so does the yuan. This is why they are trying to diversify.

[Copernicus]

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If their economy has matured to the point where they can afford total isolationism

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Since when does China selling of its dollar reserves and crippling the American economy = Total isolationism.

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Youre the one who raised the possibility of isolationism when you said, with 1/6 of the worlds population they could be a self contained economy. I was addressing the consequences of that event on their economy, which, since its the topic of the thread, would presumably start with crippling the US economy.

[Phil153]

The situation with China is going to get a lot worse in years to come.

[Felix_Nietzsche]

Brilliant! This is the best post of the thread.
The Chinese would be slitting their own financial throats if they tried this move. Their threat is empty but there are enough gulliable fools that believe this "urban legend" threat to fall on their knees and start sucking the Chi-Coms [rooster].

Jeez....there are a lot of ignorant people in this world. But the Chi-Coms have a history of doing stupid things so they might be dumb enough to try these ploy.