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China Bombs US Dollar

November, 2013


The central bank of China just dropped bombshell news that has been purposely ignored by the mainstream media. The bombshell news is that China is going to stop stockpiling U.S. dollars and accumulating foreign-exchange reserves.  During the third quarter of 2013, China’s foreign-exchange reserves were valued at approximately $3.66 trillion...and most of it was U.S. dollars. 

For years, China has been accumulating US dollars to keep the value up while keeping the value of the Chinese yuan artificially low. Why? To make Chinese products less expensive in the international marketplace.


Thanks to the massively unbalanced trade that the USA has had with China, tens of thousands of US businesses, millions of US jobs and trillions of US dollars have left the country and gone over to China.

The artificially low Chinese currency has resulted in a massive flood of super cheap products from across the Pacific that U.S. consumers have been eagerly gobbling up...like from the dollar stores.

Have you wondered how dollar stores could possibly make a profit by selling products for only one dollar? The truth is that when you flip those products over you will find that almost all of them have been made outside of the USA. In fact, “made in China” are probably the most common written words in your entire household.


Now that China is going to stop stockpiling U.S. dollars, many U.S. analysts believe that China will also stop buying any more U.S. debt - a move that would prove disastrous for the US economy.

The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings.

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.

China has decided there is not much more to gut from the US economy and it is time to let the US dollar die a slow death. The death of the US dollar won't happen overnight, but its value will soon start a downward spiral. All of that cheap stuff you are used to buying at Wal-Mart and the dollar store is going to become a helluva lot more expensive.  

What does this latest move by China mean for U.S. government debt?  America is heavily dependent on foreign nations like China to lend them money. Once that stops, it's lights out.

Recommended Reading:

 Why The U.S. Dollar Is In Trouble

 China has announced that it is going to stop stockpiling foreign-exchange reserves

The Federal Reserve Is Monetizing A Staggering Amount Of U.S. Government Debt

Why Our Financial System Is Vulnerable

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