China Currency and Trade

Re: China Currency and Trade

I read a story from the TimesOnline: www.timesonline.co.uk, that
claims the dollar is beginning a steep decline, particularly against
Asian currencies. They cite an 800 Billion account deficit (not
sure what "account" they are talking about) and that China raised a
key lending rate to 5.85%.

But why would China allow it's largest customer's currency to tank?
Lets say the dollar looses 50% of it's value. Even Chinese goods
would become expensive. Chinese exports would slow. Millions of
Chinese workers would be jobless, political unrest would surely
follow. It sounds like a recipe for disaster.

And, What are the chances the US will end up like Chile, or
Argentina of old with runaway inflation? Will my retirement
savings be wiped out, worthless?

Thinking the worse,
Anthony



--- In spiers@yahoogroups.com, "John Spiers" wrote:
>
> 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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