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."