The question is are we just hearing political banter or should we believe the Chinese? Several weeks ago Premier Wen Jiabao called on March 13 for the U.S. ג€to guarantee the safety of Chinaג€™s assets. The fact that even buying and holding US Treasuries the Chinese are losing money as their currency the Yuan has appreciated versus the US Dollar.
All the while, yesterday Obama came out with support of the US Dollar and to reply to the Chinese he stated, ג€I donג€™t believe there is the need for a global currency,ג€. The obvious fact is that the Chinese are nervous holding US Dollars. Why shouldn’t they be after last weeks $1 Trillion dollar printing party. I think many of us are nervous holding dollars and maybe rightfully so. But, lets put in the reality. Maybe the US Dollar is the best of the worst. The European economies are in bad shape. They seem slow to react to the current reality.