Re: Gary Pichon’s “Where do my dollars go”? 6/6/2019
So much to correct and unpack here that I don’t know where to start.
First of all Chinese businesses do NOT insist on being paid in Yuan. Exactly the opposite is true in that they insist on being paid in US dollars as do virtually all exporters who do business with the US. Then the People’s Bank of China (PBOC) buys these US dollars from their exporters and replaces them with Yuan so the Chinese businesses can pay their employees and suppliers in local currency. China then takes the US dollars and uses them to pay for items imported from other countries (including the US) and to purchase among other things US Treasury Bonds. This is effectively purchasing US debt and at any given time the PBOC holds approximately $3 trillion dollars worth...
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