Threats To The Dollar

Article Excerpt

China holds $1.4 trillion in U.S. dollars, and has talked of selling some of them. This brings to mind the proverbial boy-who-held-the-tiger-by-the-tail. It took China decades to build this hoard. Dumping part of it would undermine the value of the remainder. Moreover, China needs U.S. goodwill. It needs buying by U.S. consumers far more than they need cheap manufactured goods. The Chinese demonstrate this need in subtle ways. For instance, after poisoned Chinese pet food ingredients killed some North American dogs and cats, China quickly executed the former head of the Chinese FDA, who was on trial for taking bribes. Chinese villages are full of restless young men who know about modern life from community TV and the Internet, and want their share. Many are already frustrated by a shortage of marriageable women. This grows out of China’s one-child-per-family policy, which led many families to hold out for a son and abort girl babies. Failing to keep the boys employed could spark…