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8/10/07

National Business Review (NBR) - The World Economic Crises - Chinese officials say they can cause $US crash

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The World Economic Crises - Chinese officials say they can cause US $ crash

The Chinese government has threatened to liquidate its vast holdings of US. dollars if Washington follows through on a threat to force Beijing to revaluate its own currency. Two Communist Party officials in recent days have said in interviews China could use its $1.33 trillion worth of foreign reserves to counter congressional pressure on Beijing to adjust the value of its yuan.

Such a move by China would threaten a crash of the U.S. dollar at a time when it has already lost ground worldwide. It also could trigger a spike in the U.S. bond yields, which could then seriously affect the housing market - already beset by credit woes - and put the economy into a recession.

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