China breaks the rules and issues dollar-denominated sovereign bonds in Saudi Arabia. This is not just a deal, but a layout: using the dollar to shake the dollar system and show the world China's infinite potential as a new financial force. The seeds we have planted may breed a new global financial landscape.
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China use the US dollar to dismantle the US dollar hegemony system
- Thread starter ftan42
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Master move: China's borrowing of USD at only marginally higher interest rate than the US (a historic first) has 2 aims:
1. Control the flow of USD in the world's trading and financial systems, up till now the sole domain of the US;
2. Ironically, to eventually weaken the USD hegemony: use USD to pay off their BRI partners' massive USD debts, and convert them into lower-interest yuan loans tied to infrastructure projects. This way, they strengthen BRI collaboration while helping the BRI countries to move away from the USD system
Not much the US can do apart from the Fed increasing interest rates to make Treasuries more attractive to lenders, but this will precipitate a massive recession in the US. The other option - not really feasible as this will accelerate the demise of USD - is to sanction countries like Saudi who buy Chinese-issued USD bonds.
1. Control the flow of USD in the world's trading and financial systems, up till now the sole domain of the US;
2. Ironically, to eventually weaken the USD hegemony: use USD to pay off their BRI partners' massive USD debts, and convert them into lower-interest yuan loans tied to infrastructure projects. This way, they strengthen BRI collaboration while helping the BRI countries to move away from the USD system
Not much the US can do apart from the Fed increasing interest rates to make Treasuries more attractive to lenders, but this will precipitate a massive recession in the US. The other option - not really feasible as this will accelerate the demise of USD - is to sanction countries like Saudi who buy Chinese-issued USD bonds.
Dedollarization has been debunked, but I guess the Tiong/CCP fanboys sleep better in their delulu world.
Cope harder. Ur amdk is dead. Either by mRNA or self destruct. Lol
Saudi Arabic collected USD from sale of crude/oil and purchase bond in USD issued by Tiongkok
in return get to invest in their country infrastructure for HSR, high-tech industrial park, building factory, financial system, ...
Tiongkok can lend the USD to Global South countries in need of it to pay off their debt to EU or US preventing any default and their assets being sell cheaper to the lender
Over the time, Beekok will be flooded with their own accumulated printed fiat currency, it will cause serious high inflation
There is nothing much Beekok can do(in the past BK just start a war with them but not presently) except to issue warning to those countries that are dealing with Tiongkok to stop
in return get to invest in their country infrastructure for HSR, high-tech industrial park, building factory, financial system, ...
Tiongkok can lend the USD to Global South countries in need of it to pay off their debt to EU or US preventing any default and their assets being sell cheaper to the lender
Over the time, Beekok will be flooded with their own accumulated printed fiat currency, it will cause serious high inflation
There is nothing much Beekok can do(in the past BK just start a war with them but not presently) except to issue warning to those countries that are dealing with Tiongkok to stop
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I think it's more to assist Saudi and other Arab monarchies to steer clear of it's US Bond as they now fear they are next on US seizure list.
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