Comments on: Pay No Attention to the Man Behind the Curtain http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html Southern California is Experiencing a Real Estate Bubble like never before Fri, 04 Feb 2011 01:16:46 -0700 hourly 1 http://wordpress.org/?v=3.1 By: Chuck Ponzi http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html/comment-page-1#comment-2576 Chuck Ponzi Fri, 23 Mar 2007 20:18:31 +0000 http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html#comment-2576 Reminds me.... <blockquote> Basil Exposition: Austin, the Cold War is over! Austin Powers: Finally those capitalist pigs will pay for their crimes, eh? Eh comrades? Eh? Basil Exposition: Austin... we won. Austin Powers: Oh, smashing, groovy, yay capitalism! </blockquote> Yay, communism, groovy, smashing, shagadelic. Reminds me….

Basil Exposition: Austin, the Cold War is over!
Austin Powers: Finally those capitalist pigs will pay for their crimes, eh? Eh comrades? Eh?
Basil Exposition: Austin… we won.
Austin Powers: Oh, smashing, groovy, yay capitalism!

Yay, communism, groovy, smashing, shagadelic.

]]> By: Egon http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html/comment-page-1#comment-2574 Egon Fri, 23 Mar 2007 19:16:19 +0000 http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html#comment-2574 I, for one, welcome our new Chinese overlords. I, for one, welcome our new Chinese overlords.

]]> By: IrvineRenter http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html/comment-page-1#comment-2564 IrvineRenter Fri, 23 Mar 2007 03:05:18 +0000 http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html#comment-2564 If true, this has huge implications. If the Chinese stop accumulating our currency, the dollar will fall. If Chinese goods become expensive for American consumers, both economies will suffer. Chinese stocks will plummet along with their exports, and their whole economy will enter a deep recession. We will follow them into the abyss. Of course the good news is that all the US Treasuries the Chinese purchased will lose value, and the Chinese will lose to the extent the exchange rate changes. In other words, they are doubly F'd. At least we get to leave them holding the bag on our 1% treasury notes. If true, this has huge implications. If the Chinese stop accumulating our currency, the dollar will fall. If Chinese goods become expensive for American consumers, both economies will suffer. Chinese stocks will plummet along with their exports, and their whole economy will enter a deep recession. We will follow them into the abyss.

Of course the good news is that all the US Treasuries the Chinese purchased will lose value, and the Chinese will lose to the extent the exchange rate changes. In other words, they are doubly F’d. At least we get to leave them holding the bag on our 1% treasury notes.

]]> By: Chuck Ponzi http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html/comment-page-1#comment-2562 Chuck Ponzi Thu, 22 Mar 2007 23:14:55 +0000 http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html#comment-2562 Gab, No, even after reading Brad's blog, I'm confident that my understanding is correct. They are not diversifying... which would absolutely have a large, immediate and negative impact on dollar exchange expectations. I made it clear that accumulation would be stopping. I see no other way to read that, and Brad's site confirms my understanding that they intend to halt accumulation. That's still a concern when their reserves have been growing at such an astronomical rate that it has suppressed the USD FX and interest rates. Gab,

No, even after reading Brad’s blog, I’m confident that my understanding is correct. They are not diversifying… which would absolutely have a large, immediate and negative impact on dollar exchange expectations. I made it clear that accumulation would be stopping. I see no other way to read that, and Brad’s site confirms my understanding that they intend to halt accumulation. That’s still a concern when their reserves have been growing at such an astronomical rate that it has suppressed the USD FX and interest rates.

]]> By: gab http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html/comment-page-1#comment-2561 gab Thu, 22 Mar 2007 22:06:38 +0000 http://www.socalbubble.com/2007/03/pay-no-attention-to-the-man-behind-the-curtain.html#comment-2561 Chuck - I believe you have misunderstood Mr. Zhou's intent. The reserves will go to the new agency(ies) the Chinese are creating. See Brad Setser's web site for a detailed description. Should China sell all the dollars that it receives, it would most certainly "have an adverse impact on the U.S. dollar." Chuck – I believe you have misunderstood Mr. Zhou’s intent. The reserves will go to the new agency(ies) the Chinese are creating. See Brad Setser’s web site for a detailed description. Should China sell all the dollars that it receives, it would most certainly “have an adverse impact on the U.S. dollar.”

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