China Purchases, Yuan, Dollar

[nodoodahs]

Don't know quite where to post this so here goes.

If I were a foreign government intent of revaluing my currency, I would be looking at my holdings of the reserve currency (not mine) and thinking to myself, "gee, this stuff is gonna devalue as soon as I revalue." So what to do????

I should really dump these dollars ASAP, but dumping them via selling devalues what I have left. I know! I should commoditize these dollars! But into what????

I know! Profit-making enterprises! If I can buy entire companies that will generate returns in excess of 10YT yields, then I've gotten rid of the dollars by buying appreciating assets without devaluing the dollars that remain. Now I have fewer dollars to tank when I revalue.

Is it my imagination or is China on a bit of a buying spree? The ones that come to mind are bids for Unocal and Maytag. If so, is this a signal that revaluation is coming soon? A rise in commoditization of Chinese dollars would be a signal. Also Unocal has production facilities close to China which may reduce dependence on dollars (for oil) even further. I have mixed feelings about Unocal to China since I own CVX, but I would rather if someone grossly overpaid for Unocal it wasn't CVX.

If the revalue comes between U.S. con(opposite of pro)gress gets out of session, and before the Chinese VIP visit upcoming to U.S., it allows them to "save face" and not look "pressured."

Any feedback on these ideas?

Additional Edit: I listened to some news at lunch and they mentioned that the China buying reminded them of the Japanese move from Treasuries to solid goods in the '80's. Anyone care to bet what happened to the Yen around '85-'86?
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