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On June 9, 2007 the Zetas described the interrelationship between China's investments in US bonds, the dropping dollar, the trade imbalance, the large number of dollar's China holds, the US demands that China free their yuan from the dollar, and the recent accusations by the US that goods from China are not safe. The Zetas emphasized the primary weapon China holds - dumping the US dollars they hold.

China is a great worry for the Bush White House, not at all in control, the sleeping dragon awakened. China has been buying immense amounts of US bonds, and holds an immense amount of US dollars as a result. If they stopped buying these bonds, even at the reduced rate they have assumed, or started dumping dollars, they would devastate the US in a dropping dollar. Where this makes US manufactured goods cheaper worldwide, it makes US stocks and bonds worthless, and panic would set in. Aa China is squeezed, it will stop buying US bonds, forcing the US to print money faster, higher inflation.
ZetaTalk: GodlikProduction Live, written June 9, 2007

On Aug 8, 2007 China threatened to dump its dollars in response to Congress making noises about trade sanctions on Chinese goods. As China was squeezed, they did indeed threaten to use one of the two means to devastate the US, as the Zetas had predicted.

China Threatens 'Nuclear Option' of Dollar Sales
Aug 8, 2007
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation. Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels. It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900 billion in a mix of US bonds.

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