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Thread: Chinese Yuan Watch - decoupled from the dollar

  1. #1

    Chinese Yuan Watch - decoupled from the dollar

    has anyone noticed, that the chinese Yuan is being slowly revalued and gaining on the dollar since the decoupling from our USD???

    It is now 106 to 1 USD. It was 114 to 1 USD. They are slowly going to raise the price of chinese goods becasue of our week dollar.

    Not only that, but a chinese person has or is being appointed to head the world bank...... what is going on here????

    I'll tell you what is going on here....world government is starting rear its ugly head thru the banking world. The public is being hoodwinked by the monetary powers. We are loosing our sovereigny!

    Like snakes, they are slithering their way into controlling us.



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  3. #2
    Damn straight. We are being dispossessed in our own land, as Thomas Jefferson warned us we would be if we dropped our guard.

  4. #3
    I think you are talking about the Japanese Yen. The yuan is at 7.21 to a dollar, its lowest ever.

    http://www.cnbc.com/id/22837089/site/14081545


    BEIJING (XFN-ASIA) - The yuan finished at a new high of 7.2102 to the US dollar on the over-the-counter (OTC) market, following a record high of 7.2288 recorded yesterday. On the exchange-traded market, the yuan ended at 7.2087 - also a new high - and compared with 7.2248 in the previous session, a Guangzhou-based trader with a foreign bank said. The yuan traded between 7.2129 and 7.2055 on the OTC market and between 7.2123 and 7.2065 on the exchange-traded market. The central bank set the yuan central parity rate at record highs for the third consecutive day, with today's rate set at 7.2065 to the dollar, compared to a midpoint of 7.2293 the previous trading day. China's central bank currently sets the yuan's daily trading band at 0.5 pct. derek.jiang@xfn.com dj/kmq - xfndj/xfnkm COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved.

  5. #4
    Quote Originally Posted by weatherbill
    Not only that, but a chinese person has or is being appointed to head the world bank...... what is going on here????

    I'll tell you what is going on here....world government is starting rear its ugly head thru the banking world. The public is being hoodwinked by the monetary powers. We are loosing our sovereigny!

    Like snakes, they are slithering their way into controlling us.
    Seeing enemies everywhere and blaming everything on conspiracies is not a healthy attitude to take.

    In the 70s, US economic power declined relative to Japan, and the formation of OPEC caused gas rationing (unthinkable today) and a huge drop in the dollar's value. The US seemed to have regained its footing successfully (I wonder if the world government conspiracy nuts had as active imaginations back then as today).

    There are many parallels between China now and Japan 2-3 decades ago and it just reflects these respective countries' forward economic progress. Having a Chinese appointed to the world bank is recognition of the economic clout that China now possesses. Such clout is more due to US consumers (who naturally shop around for the cheapest goods) rather than to any planned conspiracy.

    But there is a conspiracy all right: capitalists in Asia conspiring to flood the US with cheap goods. You are always free to say no that (individually-speaking).

  6. #5
    It is not bad to buy cheap (in the price, not quality sense) goods from china. Getting stuff cheaper is a benefit.

    What is bad though, is getting into debt in order to finance a spending spree.

  7. #6
    Quote Originally Posted by jon_perez View Post
    It is not bad to buy cheap (in the price, not quality sense) goods from china. Getting stuff cheaper is a benefit.
    What's bad about cheap goods is when they are artificially cheap. The Chinese currency is priced at on the order of 25% of its real value. The result is a mis-allocation of capital, and a misdirection of spending. Manufacturing capacity and capital both move to China. If the currency had been allowed to float, the prices of imported goods would be 3 or 4 times higher than they are today; we would still have manufacturing capacity in the US, and the wealth that it represents.

    If I was just a little more cynical, I would say that China is waging economic war against the US. Instead of bombing anyone -- just drain our wealth, sow the seeds of destruction of the dollar, and when the time is right, cut the cord and watch us starve and riot.
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  8. #7
    If they can pull off a slow transition to market defined valuations we can perhaps work our way out since our goods will be more competitive overseas.
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  9. #8
    Quote Originally Posted by AceNZ View Post
    What's bad about cheap goods is when they are artificially cheap.
    That's one way to look at it. Another of course is to say that if someone is selling goods "too cheaply", they are shooting themselves in the foot.

    The yuan being "artificially cheaper" also means that the dollar is "artificially stronger", so knowing that one can always adapt a strategy to take advantage and punish the imbalance rather than to complain.


    If I was just a little more cynical, I would say that China is waging economic war against the US. Instead of bombing anyone -- just drain our wealth, sow the seeds of destruction of the dollar
    The thing with economic war of course is that it cannot be won without the cooperation of the other side. It's a bit like judo I suppose, where you are using your enemy's own strength against him. But it also implies that you can't be hurt if you don't cooperate.

    and when the time is right, cut the cord and watch us starve and riot.
    I don't think this last part is to anyone's interest.

    Think of how the US practiced its modern version of mercantilism in the decades after WW2. It set up friendly governments all over the world but promoted stability (no starving and no riots) so that it can suck up the economic gains made by steadily prospering "serf" economies. This was accomplished in no small part through the power of its fiat currency accepted to be as good as gold by the rest of the world for a rather long time (The excellent book "Empire of Debt" has much to say about this). This is much subtler than slash and burn colonization, but it did depend on maintaining US hegemony. Now that mechanism seems to have been overstretched and the chickens are coming home to roost.

    Challenging American hegemony by taking advantage of the US' more-or-less self-inflicted economic malaise is one thing, but replacing the US as new 800-pound gorilla is rather unthinkable at this point in time, China has to think of competing with both Russia and India for one. Moreover, neither of the 3 countries possess the immense geographic advantages that the US has - e.g. having the entire continent for itself.

    There is much to say about the view that America's woes are due to it being an empire overstretched. The question is if Americans are ready or willing to accept the loss of prestige entailed by dismantling this empire and going back to the country's origins - a proper, and otherwise proud, republic. This is very much Ron Paul's message, I gather.

    You won't hear this analysis from Romney, that's for sure. The guy still panders to the "righteous empire" viewpoint.
    Last edited by jon_perez; 01-29-2008 at 01:22 AM.



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  11. #9
    Quote Originally Posted by jon_perez View Post
    The yuan being "artificially cheaper" also means that the dollar is "artificially stronger", so knowing that one can always adapt a strategy to take advantage and punish the imbalance rather than to complain.
    Sure. I supposed you could say that borrowing from China and paying them back in a debased currency is one way of punishing the imbalance. But each move has a counter-move, so it will be interesting to see how the Chinese react. Letting the yuan increase in value now, which would make commodities like oil less expensive for them and more expensive for us, would be an interesting move, for example.


    Quote Originally Posted by jon_perez View Post
    I don't think this last part is to anyone's interest.
    Of course; I was only being facetious. But that doesn't mean it isn't possible.


    Quote Originally Posted by jon_perez View Post
    Challenging American hegemony by taking advantage of the US' more-or-less self-inflicted economic malaise is one thing, but replacing the US as new 800-pound gorilla is rather unthinkable at this point in time, China has to think of competing with both Russia and India for one.
    China doesn't seem to have the imperialistic desires of the US, but I think there's every reason to believe that they will be the new 800 pound gorilla in terms of economic influence. Throughout history, that role has always been held by the largest creditor nation -- and that is China. They are already competing with Russia and India, neither of which has anything close to the infrastructure or even the national will that would be needed to win.
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