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<blockquote data-quote="vantexan" data-source="post: 3325212" data-attributes="member: 24302"><p>That&#039;s not in the same arena.&nbsp; The U.S. Dollar is the world&#039;s reserve currency.&nbsp; There&#039;s only so much we can do in terms of the Fed raising and lowering interest rates.&nbsp; On the other hand the Chinese refuse to let their currency float on the open market.&nbsp; As to the loan collateral I referred to.&nbsp; The Chinese consider copper to be semi-precious and use it for collateral on bank loans.&nbsp; They&#039;ve got huge warehouses everywhere full of it.&nbsp; Problem is the same copper is often used as collateral on multiple loans.&nbsp; If a Chinese company defaults on a loan, which only recently started happening because the Chinese government always backed their companies before, and the copper collateral is taken away, it leaves other loans with no underlying collateral.&nbsp; The Chinese banking system could collapse due to this if their companies start failing.&nbsp; One of the main reasons China manipulates their currency to their advantage is to avoid this.&nbsp; They don&#039;t play by the same rules and as their government relaxed restrictions on capitalist enterprise these fundamental banking flaws occurred.&nbsp; And if their banking system did collapse a lot of Western investment would be swept away with it.</p></blockquote><p></p>

[QUOTE="vantexan, post: 3325212, member: 24302"] That's not in the same arena. The U.S. Dollar is the world's reserve currency. There's only so much we can do in terms of the Fed raising and lowering interest rates. On the other hand the Chinese refuse to let their currency float on the open market. As to the loan collateral I referred to. The Chinese consider copper to be semi-precious and use it for collateral on bank loans. They've got huge warehouses everywhere full of it. Problem is the same copper is often used as collateral on multiple loans. If a Chinese company defaults on a loan, which only recently started happening because the Chinese government always backed their companies before, and the copper collateral is taken away, it leaves other loans with no underlying collateral. The Chinese banking system could collapse due to this if their companies start failing. One of the main reasons China manipulates their currency to their advantage is to avoid this. They don't play by the same rules and as their government relaxed restrictions on capitalist enterprise these fundamental banking flaws occurred. And if their banking system did collapse a lot of Western investment would be swept away with it. [/QUOTE]

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