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On Jan 4, 2010, at 12:49 PM, nada wrote: > > "Tell me again how this debt swap works between Russia and China-- > China > usesthe Tsy instruments as currency for payment of hard goods? OK, > how does > that insulate either party from the world markets? If the value of the > dollar declines, then these instruments essentially lose face value > upon > either redemption, as the "new dollars" are less valued than the old > dollars > used to buy the instruments, or upon sale in the secondary markets-- > same > reason... That some speculators would dump dollars if they thought (rightly or wrongly) that the Chinese Central Bank was going to lessen its dollar exposure in some meaningful way is totally expectable. But that hasn't happened noticeably since the Russia deal was announced. So why should the dollar fall (against the Euro and Yen) when the Russians eventually take the cash as the bonds expire? By the way, isn't the brouhaha about Chinese "mercantilism" just the old "Open Door" in a new guise? Shane Mage > This cosmos did none of gods or men make, but it > always was and is and shall be: an everlasting fire, > kindling in measures and going out in measures." > > Herakleitos of Ephesos ________________________________________________ Send list submissions to: Marxism@lists.econ.utah.edu Set your options at: http://lists.econ.utah.edu/mailman/options/marxism/archive%40mail-archive.com
