China selling off US dollars for oil

[Onkel Neal]

Smart move! (http://money.cnn.com/2009/08/17/news/international/china_oil/index.htm?cnn=yes)And down the road, who needs oil more than the US? :o


China wants to buy oil for several reasons. First, they can. Their huge trade surplus means the Chinese have racked up a giant stash of dollars. But this pile of dollars can be dangerous. Many worry the dollar is set to fall due to rampant American spending. But China is stuck. It can't sell them too fast for fear of accelerating the dollar's weakness. So buying hard assets like oil is a great way for China to diversify its holdings, without destabilizing the greenback.

[Mush Martin]

Very Smart :yep:

[Oberon]

Say what you like about Beijing, they are shrewd spenders :yep:

[Jimbuna]

I wonder where they plan on storing all this oil :hmmm:

Much simpler to buy shares in an oil company or purchase an oil field if they have that much cash lying around.

[Oberon]

I wonder where they plan on storing all this oil :hmmm:

Much simpler to buy shares in an oil company or purchase an oil field if they have that much cash lying around.

If your next load of sweet and sour prawn balls taste a bit more greasy then you'll know :03:

[SteamWake]

I wonder where they plan on storing all this oil :hmmm:

Much simpler to buy shares in an oil company or purchase an oil field if they have that much cash lying around.

Did you read the article? There buying up oil fields :yep: they will just keep the oil in the ground till someone begs for it.

The US has a lot of tapped and capped oil fields as well. We currently cannot draw on these wells due to enviromental regulations. I suppose in a crisis they may draw on these 'surplus' wells after all. China on the other hand are not beholding to enviromental regulations and can draw on the newly purchased fields at will.