Jan. 13, 2007: Currency -- Memory Lane

China Set To Reduce Exposure To Dollar

Move Would Probably Push Currency Down , Peter S. Goodman with files from Eva Woo, Washington Post Foreign Service, Tuesday, January 10, 2006; Page D01

www.washingtonpost.com/wp-dyn/content/arti
cle/2006/01/09/AR2006010901042.html

SHANGHAI, Jan. 9 -- China has resolved to shift some of its foreign exchange reserves -- now in excess of $800 billion -- away from the U.S. dollar and into other world currencies in a move likely to push down the value of the greenback ....

.... China's fears that too much of its savings is tied up in the dollar, a currency widely expected to drop in value as the U.S. trade and fiscal deficits climb. [....]

Not all economists anticipate negative repercussions for the U.S. economy. Were China and Japan to engineer a significant fall in the dollar, those nations also would suffer the consequences -- sharply diminished exports as Americans lose spending power, plus a drop in the value of their dollar assets. [....]

Warnings about an impending Chinese sell-off in dollars emerged in July [2005], as China slightly altered the way it sets the value of its currency, the yuan, ... shifting from a system in which the yuan moves with changes in the dollar to one where it tracks a basket of currencies including the yen, the euro, the Hong Kong dollar and the South Korean won.

The move temporarily muted criticism on Capitol Hill from those who accuse China of currency manipulation, asserting that an artificially low yuan has made China's goods unfairly cheap on world markets. But as the implications of the new currency policy rippled out, some analysts suggested that China would thereafter have less need for dollars and greater need for the other currencies in the new basket, sending the greenback down and risking higher U.S. interest rates that would dampen economic growth. [....]

Memory Lane: Frost Hits the Rhubarb July 17 - 23, 2005 -- Irvings LNG, Port, Nuclear Power, NB Power, Feds: Political Business as Usual, Buy "Canadian"!
Search that webpage for:

A little background: Nuclear Power - New Brunswick Power -- "Proposed Irving power plant will affect N.B. decision about nuclear station by Chris Morris" , CP, October 26/2004

China's vast Canadian and Australian espionage revealed by defectors
discardedlies.com/entries/2005/06/chinas_vast_cana
dian_and_australian_espionage_revealed_by_defectors.php

Think of foreign aid to China, Canadians' tax dollars; The Librano$ gave $50-M to China in Aid [www.smalldeadanimals.com/archives/002201.html] Now the Chinese have more money left to buy Canadian assets and to bid on US ones like Unocal.

... at the G-8, Canada promised ... $3-BILLION Canadian taxpayers' dollars

An uproar in Canada over the latest revelations led to a law being passed allowing the government to block China from buying stakes in national security-critical industries.

www.forbes.com/home/feeds/afx/2005/
06/21/afx2103069.html