|
| Previously we bought $250 billion ($50 B + $200 B) in Chinese goods and paid with dollars. The dollars needed to be converted to Yuan so the result was that the currency traders handed over the equivalent in Yuan and accepted the $250 billion dollars. In the future this will not happen so they will have $250 billion fewer dollars available.
People needing dollars to buy American goods will have to pay more for the fewer dollars available thus making them more in demand & more valuable. The dollar will get stronger.
And the stronger dollar will make US goods more expensive so fewer US goods will be purchased by our "few remaining" trading partners. And in order to remain competitive for things like soybeans we will have to lower the price of soybeans even more. | |
|
Additional 200 bill, What's it mean for dx?
