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It's not like China is sitting on a big mountain of Ben Franklins somewhere. If it is smart (and it is), it invests the dollars it is hoarding in US Bonds or so
by Xichekolas 19y ago
It's not like China is sitting on a big mountain of Ben Franklins somewhere. If it is smart (and it is), it invests the dollars it is hoarding in US Bonds or some other very safe vehicle (US Bonds might as well be bulletproof, short of WWIII). The problem is that even though China is investing in dollar-assets, this isn't counted in the silly trade deficit figures.
- eru 19y agoI agree. The US won't default on bonds anytime soon. But they are only bulletproof in terms of value when you measure value in US$ - and not in adjusted terms (inflation, purchasing power paritiy, exchange rate, etc).