China Currency and Trade

Folks,

I am in Hong Kong right now, taking care of a few things, more on that
anon. It is fun to watch the news here, and compare the free press in Hong
Kong and the Chinese State media, and compare the two. More on that later
also.

One thing that jumped out when I went into China the other day was the
street hustlers were trying to get RID of their USA currency. I've never
seen this before. Black marketers have always wanted to get INTO the US
dollar. The second time in, the bank at the train station simply had no
RMBY to exchange. "No more money" the sign said. If you plan to visit
China in the next year, you may want to load up on RMBY now... you can get
it from HSBC in USA.

If street hustlers are trying to get out of the dollar, the end is nearer
than I thought, although who knows what that will look like.

USA is pressuring China to make the Yuan more ewxpensive, so usa exports
are less expensive, and imports to usa are more expensive. Please
understand what this means: our government wants we consumers to fare less
well, to benefit a very small group of people, USA big biz, the republicans
friends (when the dems sweep congress this fall, their friends will start
to do better). Now, this is not debatable, it is not conspiracy, it is
just policy. And of course I object, for what it is worth.

The Chinese will change things when it best benefits them, but a couple of
points. Although the Hong Kong dollar is a free market currency, produced
by private companies, and properly so (three different companies print
currency in Hong Kong, and the three of them compete against each other...
with the Hong Kong govt issuing some vouchers as well... just like it used
to be in USA), the fact of the matter is Hong Kong is a fully owned
subsidiary of the Communist party, so they own it. Hong Kong represents
fantastic wealth and money flows. I've never heard anyone take this into
account when estimating Chinese econ power. I think the numbers US policy
makers are working with are wildly under-estimated.

US policy makers were shocked, shocked when the dollar strengthened against
the euro. "The currency markets misread us" say the policy wonks. At any
rate, the policy makers are admitting they do not have the control they
think they have.

Finally, I asked my banker in Hong Kong if I could use my hong kong money
to invest in hong kong stocks. No. The price of doing business in USA is
to cooperate with the US Govt in forbidding US citizens to protect
themselves against US econ policy. I object!

"May you live in interesting times" is a Chinese curse.

John

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