Everyone Will Be Wiped Out in 30 Days.. message strange truth world news current events December 2022 today this week this month motivation. Clearly, most of the foreign currency deposits in China are in US dollars. And so now when Chinese banks take US dollar deposits, they can't make as many loans. They have to hold more dollars than they had been holding. And so the idea here, Is that this is going to increase dollar demand in China because the banks are now gonna have to buy more dollars or hold onto more dollars, so not sell as many dollars, but I don't think this move is going to provide any significant support to the dollar. The question is, is this an indication? That the bank is gonna do more to try to slow down the dollars decline, which I think would be a mistake. I think monetary authorities should let the market function and let the dollar fall. The dollar's gonna be falling against a lot of currencies, not just the Yuan, but one way that this might backfire, if the goal of the policy is to strengthen the dollar, is if Chinese banks, which now have to hold more dollars in reserve, and so they can't loan out as. Maybe they will also reduce the interest that they pay their depositors on their US dollars because obviously they can't make as much money loaning out those dollars. And if they do that, then that will simply widen the disparity between what you can earn on your r and b deposits or you on deposits. Versus what you can earn on your dollar deposits. And so what they end up doing is selling their dollars so that they can convert their deposits to Yuan and earn more interest. Now, this is gonna happen anyway as the dollar really starts to fall. and the people in China start to perceive the risk of holding dollars, and they would prefer the safety of owning local currency. So that is gonna happen anyway. But also, you know, there's been a lot of people who have pointed to the Chinese currency peg, and they said, if it wasn't for this peg, it's the Chinese yuan that would fall. That somehow by pegging the currency to the dollar, they are having an artificially strong currency. But for that peg, the yuan would crash clearly when. Central bank is intervening to support the dollar. That's not true. It's the dollar that's going to crash if China pulls the peg, not that you want. And in fact, the main reason that the FX reserves are so large in China is because that's how many dollars they've had to buy to prevent the dollar from falling and to artificially suppress their own currency.