Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
There's no harm to it ... its not being held in order to accomplish something, its being held as a side-effect of maintaining the exchange rate at the pegged level. If there is any damage done, it was already done when the bonds were purchased.

If the Chinese were to sell them into a market without a strong Chinese demand for them, the result would be an appreciation of the Chinese currency relative to the U$, and if it was done in the kind of massive way raised by fear mongers, would result in a US export boom to China.

And that would not be a harm to the US as such, though it would be a harm to those interests within the US who believe they benefit from a sluggish labor market, and who raise funds in US$ in order to actually invest them  elsewhere.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Sep 3rd, 2015 at 09:33:41 PM EST
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