Will China Dump Dollars When U.S. Fed Eases Interest Rates?

The Liberty Beacon Staff

China has amassed a huge amount of US treasury notes, bonds and bills, and if they need or want to dump a large quantity, it could have a catastrophic effect on America’s Economy as to the Global Dollar. 

The Chinese will also not want to do a massive sell off all at once because that could also push-back on their own economy.

There is a lot to consider:

Lowering its exposure to US debt 

Engage in a war over the issue of Taiwan

US and its allies pre-empt any moves by China with heavy sanctions

Freezing China’s dollar assets and access to the international banking system.

China may have no choice, as the U.S. Fed looks like it is bowing to political and other pressure to start easing interest rates ahead of the U.S. November election..  

Asia Times reports…

Eurizon SLJ Capital predicts that Chinese companies to shed at least $1 trillion in dollar assets as repatriating capital heads China’s way.

The US Federal Reserve has a rather checkered history in Asia, particularly since the mid-1990s. The last time the US central bank tightened with the ferocity it did in recent years was between 1994 and 1995. That doubling of short-term rates within 12 months paved the way for the 1997-98 Asian crisis as a runaway.

Behind Asia offers some additional analysis on China’s increasing de-dollarization efforts.

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(TLB) published this article as written and compiled by The Liberty Beacon staff with additional reporting and analysis from Asia Times and Behind Asia

Header featured image (edited) credit WP open public file

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