Why China has foreign reserves in its capital in use?
China is expected to accumulate massive foreign exchange reserves. I wonder why a country that is still poor and in need of infrastructure money should pay both U.S. maintenance of so many Treasury bonds instead of investing
China is the accumulation of long positions in U.S. Treasuries and notes. Why? Because the export of millions of dollars of goods to the States U.S. and receives in exchange for dollars, which must be transformed into local Chinese RMB (yuan) for use locally. The government thus far is $ U.S., which invests values of the safest in the market – Bonds The governor and U.S. notes. We also have diversified into euro bonds …. The governor, but above $, since accumulate a large surplus of dollars each year. They began an implementation of this capital for other investments – it recently announced taking a 10% stake in Company Private equity firm Blackstone when floating an initial public offering this summer. They have also done work to the purchase of certain oil companies. They began to use the capital to finance expansion of their foreign assets of the oil reserves – for the purchase and exploration. I think once they feel they want continue building its internal infrastructure mailny – which will result in huge efficiency in its own domestic economy. For example, 40% of cement in the world is used in China is that 20% of copper worldwide. That's a lot of hi-rises, roads and cables. Once they manage their economic resources to promote the acquisition of and growth outside China, there will be a bidding war for the huge assets in the world. The displacement of hundreds of billions of dollars of cash reserves (obligations of the U.S.) in global equity fund is likely to be a good stock market performance, some time after 2010. For your benefit of "slave labor" in the United States and Europe have also benefited enormously. Each of consumption worldwide has benefited from the falling price of consumer goods because China has been able to be the world's leading producer of low-volume cost.
UN dollar to replace US dollar? – WARNING GLOBAL NWO CURRENCY AHEAD!!!!
