tectol - Thanks for providing that interesting commentary of David Pilling from Financial Times. Personally, I think Mr. Pilling is either in the secret employ (bribed) of British bankers and their allies. The most telling evidence of this is the following paragraph from his commentary:
"Third, Beijing’s nightmares of a sudden fall in the dollar depleting its foreign reserves are overdone. It is true the government has been heavily criticised for ill-timed purchases of equity stakes in western banks. But China’s holdings of US Treasuries are not an investment. Unless Beijing is seriously considering selling down its US assets, a fall in the dollar would produce purely theoretical losses."
How in the name of logic and common-sense can he say "China's holdings of US Treasuries are not an investment."? Why do individuals and investment firms and nations purchase US Treasuries unless they believe they are worth something, and that they will at least "break even" on the purchase or, hopefully, make money on such a purchase.
China is 'pissed' that the U.S. is printing out new treasury notes (i.e., US dollars) like they are operating a high-powered confetti-making-machine. China sells us something, and we hand them treasury notes (i.e., dollars), and in the meantime our Federal Reserve is printing new ones like crazy, and our government is passing them out to big banks as bailout funds.
Who would not be LEGITIMATELY concerned about the actions of the U.S. banks, in collusion with the U.S. government, cheapening the dollars you just received in payment - and at a very fast rate of "cheapening" (i.e., inflation).
No, the truth is that China is seriously concerned, and some "heads are gonna roll" (and in China, that ain't just an expression - they are still executing executives for tainted milk, tainted paint, etc., which got shipped to the U.S. and other countries that has raised a new outcry against Chinese imported goods).
If those in charge of Chinese economic affairs are found to have been imbeciles who let themselves and their nation get cheated out of billions of dollars of money, they fear that the Chinese Politburo will send their heads rolling. So, it is not a mere idle pronouncement from the Chinese central bank governor that China is proposing "replacing the dollar with an international reserve currency" based on copper and other industrial metals.
I think Mr. Pilling, who wrote that piece, did so after his after-work drinking bout with his British banking friends (or after instructions to "spin" the news out of China to make it not so important as it really is).
