China wonders out loud about dollar
Chinese Premier Wen Jiabao
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Scott Jagow: Here in the U.S., a dollar is always worth four quarters, or 10 dimes, or 20 nickels. But on the international currency market, the dollar's value changes every day. Lately, it's just been going down.
Today, the dollar hit another record low against the euro: $1.47. Every time the dollar falls, Chinese officials break out their calculators and get a worried look on their faces. Bill Marcus reports from Shanghai.
Bill Marcus: There's a saying that when you owe the bank $100,000, you have a problem, but if you owe them $1 million, they have a problem. What if the amount is $1 trillion, 430 billion?
That's how much China's holding in dollars. Except in this case, because of the fall of the U.S. currency, it's a debt that's decreased in value by 16 percent this year alone.
Today in Singapore, China's premier, Wen Jiabao, wondered out loud how much longer China will hold on to its dollars, saying China's starting to worry about the value of its reserves. Fears of Beijing dumping its greenbacks are likely to fuel market speculation, and make the dollar drop even worse.
Two weeks ago, when another top China official wondered out loud about the dollar's value, the Dow lost over 360 points -- at that time 2.6 percent.
In Shanghai, I'm Bill Marcus for Marketplace.