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pan6467 · 11-17-2005, 12:00 PM

BTW China, Japan, Taiwan, Europe can destroy our economy in a matter of hours because of the trade deficits we have with them.

All they have to do is sell all their US currency and debt for fifty cents on the dollar and start demanding payment of the trade debts...... and the dollar would valueless in hours.

Gates, Buffett, Soros, the world's richest men and top economists know this..... They feared in FEB. this year that Asia and these guys were going to do it.

To prevent them from doing it our country has to kiss their asses or face financial ruin...... IT'S A FACT.

Quote:

Gates, Buffett and China Gang Up on Dollar -BL: William Pesek Jr.

Feb. 2 (Bloomberg) -- The dollar can add the world's two richest men to its list of detractors, something that's raising eyebrows here in Asia.

Bill Gates, chairman of Microsoft Corp., left no doubt of that, telling television host Charlie Rose ``I'm short the dollar.'' The world's wealthiest man called the record $7.62 trillion federal debt ``a bit scary'' and lamented that the U.S. is in ``uncharted territory'' fiscally.

And he's right. Just ask Warren Buffett, the world's No. 2 moneyman, who has been buying foreign currencies since 2002, citing concerns about the U.S. deficit. The bet is paying off, too. Buffett's Berkshire Hathaway Inc. reaped a $412 million pretax gain on the trade in the third quarter of 2004.

Gates and Buffett may not be reading from the same playbook as George Soros, though their investments bear some similarities. Financier Soros has long since given up on the world's reserve currency, and U.S. President George W. Bush's competence on economic matters.

Yet the U.S. is managing to run afoul of an even more powerful force than wealthy individuals: the world's fastest growing major economy. China, it seems, has had just about enough of the U.S.'s bickering about its currency policy.

`Reasonable Level'

``Please leave it to us,'' Li Ruogu, deputy governor of the People's Bank of China, said in Davos, Switzerland, when it was suggested a stronger yuan would help China. ``We are happy and willing to listen, but don't ask us to practice what you say,'' he said.

Huang Ju, who directs China's finance policy as deputy prime minister, threw even more cold water on speculation the yuan will rise. ``We have to maintain the exchange rate at a reasonable level,'' said Huang, who also was attending the World Economic Forum in Davos.

Yet it's Chinese officials further down the political food chain that seem to sympathize most with Gates and Buffett. ``The U.S. should take the lead in putting its own house in order,'' said Chinese central bank adviser Yu Yongding.

It's breathtaking, really, to see the U.S. being chastised by Chinese policy makers. Perhaps it's payback for all the lecturing Treasury secretaries from Robert Rubin in the 1990s to John Snow today have done here in Asia. More likely, though, Chinese officials are getting antsy about their own U.S. dollar holdings.

Group of Seven

If Gates sunk his entire $46.6 billion fortune into U.S. debt, it would only amount to about a quarter of China's holdings. Officials in Beijing buy U.S. Treasuries to maintain their 8.3 peg to the dollar. And its U.S. debt holdings are on the losing end of the dollar's 26 percent drop against a basket of six major currencies since the start of 2002.

A lower dollar increases China's competitiveness, yet it may have too much of a good thing on its hands. While China won't free the yuan for fear of losing control over its economy, a lower exchange rate makes it harder to cool inflation and avoid overheating this year.

The issue is coming to a head days before Group of Seven officials meet in London. There's little doubt the dollar's weakness, and the euro's resulting strength, which will be the center of attention. European Central Bank President Jean-Claude Trichet has voiced concern about the dollar.

The Risk

Until now, the U.S. has been able to dazzle currency traders with its deficits-don't-matter poker face. Yet it's clearly losing its ability to keep investors -- and central banks -- in check. Once central banks here in Asia turn on the dollar, the U.S. is in for some very turbulent times as bond yields surge.

The risk can be seen in China's evolving incentives to alter its dollar peg. The U.S. has been using its strength to push China to boost the yuan, thereby reducing its trade advantage. Yet it's the risk of instability and big losses on dollar holdings that may ultimately force China's hand. So it's U.S. weakness, not strength, that's turning heads in Beijing.

Amid all this, Gates and Buffett are warming up to China. It's a risky proposition, perhaps, given its fragile financial system, inadequate transparency, lack of democracy and failure to halt the piracy of goods. In Davos, Gates described China as a ``change agent'' for the next two decades.

In September, Gates's $27 billion foundation received approval from China's foreign-currency regulator to invest as much as $100 million in yuan shares and bonds. Buffett, who visited China with Gates in 1995, made his first investment there in 2003, buying a stake in PetroChina Co.

Still, the U.S.'s biggest challenge isn't keeping Gates or Buffett happy; it's persuading the central banks of China and the rest of Asia not to dump their roughly $1.1 trillion of U.S. Treasury holdings. If they do, the world's two richest men also may be two of its most prescient currency speculators.

LINK:http://www.swissamerica.com/article....n.txt#anchor15

Just a year ago Japan threatened to do it to us because they didn't like our policy.....

Quote:

Japan threatens huge dollar sell-off

Heather Stewart in Tokyo
Sunday December 5, 2004
The Observer

Japan is warning the White House that there will be 'enormous capital flight' from the dollar if the Bush administration maintains its laissez-faire approach to the mounting currency crisis.
Tokyo fears that Japan's strongest economic recovery in a decade could be derailed by the sudden appreciation in the yen against the greenback.

The criticism of President Bush's inaction, by a senior member of the ruling Liberal Democratic Party, will be taken as a veiled threat that Japan could start to sell off its multi-billion-dollar holdings of US Treasuries. 'The Japanese government is going to ask for a strong dollar policy; if it continues to fall, there would be enormous capital flight from the dollar,' said Kaoru Yosano, chairman of the LDP's policy council, adding that Japan would be calling on its fellow G7 governments to demand the US deal with the massive fiscal deficit that has helped to prompt the dollar's decline.

Yosano's remarks echoed a warning from a senior Japanese Ministry of Finance official that if the US does not push up interest rates to make the dollar more attractive, 'the one-way sentiment on the dollar will have a negative impact on the flow of capital into the US.' He added that Japan is urging its European counterparts to join a campaign of coordinated currency-market intervention, saying: 'If the dollar is depreciating, we should have coordinated action: that has already been communicated to my European counterparts.'

Like Japan, the eurozone fears that its tentative recovery could be choked off by the fall in the dollar, which European Central Bank president Jean-Claude Trichet has called 'brutal'. However, the ECB has so far dismissed the idea of intervening.

Japan is taking a double hit from the decline in the dollar because the Chinese renminbi is pegged to the US currency, so Japanese exports are simultaneously becoming sharply dearer in both their major markets. Takeo Fukui, the chairman of Honda, admits, for example, that an appreciation of 1 yen against the dollar, if it lasts for more than three months, knocks 10 billion yen off the carmaker's profits.

These people are just making sure the market for their goods will be ready in other places. Once their new markets are set ........... bye bye.