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01/28/2005 Entry: "China loses interest in the Greenback"

AMERICAN PROGRESS - A top Chinese economist, Fan Gang, says his country,
which finances a large portion of America's debt, has "lost faith in the
stability of the U.S. dollar" and will begin investing in a "more
flexible basket" of currencies. The announcement comes as a result of. .
. fiscal policies which are leading the dollar towards a dangerous "free
fall" that could imperil the U.S. economy. "The U.S. dollar is no longer
- in our opinion is no longer - (seen) as a stable currency, and is
devaluating all the time, and that's putting troubles all the time," Fan
said. The dollar "hit a new low in December against the euro and has
been falling against other major currencies on concerns about the
ever-growing U.S. trade and budget deficits."

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