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This post was edited by abramicus at 2014-9-27 15:45|
TIME FOR THE CHINESE LEADERSHIP TO TAKE OVER THE PBOC AND DEVALUE THE YUAN TO 6.15.
The question framed by the WSJ is off the mark. The question is not whether or not Zhou is on the way out. Nor its corollary, as to who will take his place. Neither rumors have basis in fact, but the pattern of creating a rumor in order to prevent it from happening has occurred many times before, and each time with the opposite effect of the rumor's apparent intent - Zhou emerged the winner against the baseless rumors made against him.
On August 26, 2010, the Weibo supposedly published an unfounded rumor, that Zhou was about to lose his job because he lost $430 billion dollars in the US Treasury market, and later on, it changed to Fannie and Freddie stocks. A week or so later, he emerged as the winner, a proven survivor, with enhanced prestige and power. Remember, it was in July 2010 that the PBOC began its current disastrous relentless revaluation of the Yuan that reduced the annual growth rate of China's GDP from 14% to barely above 7% today.
In 2012, it was Zhou who told reporters that he might be retiring, and seemed to be writing articles summing up his past achievements in the vein of an autobiography. Then, the opposite happened, and he was retained against the almost iron-clad rule that top leadership positions must not be assumed past 65 years of age, and was appointed by Xi for a third term.
So now, in 2014, how should we take this rumor from a China-unfriendly WSJ article? Taken in the context of all previous false rumors mongered about Zhou, it probably was the Western way of ensuring that their man would remain in office, given the intense criticism being leveled on the PBOC as China's GDP annual growth rate is crashing below the State Council mandated 7.5% annual growth rate. And, an honest analysis of the causes of China's economy crashing will point squarely to the irrational revaluation of the Yuan against the dollar and all currencies as the chief culprit, which forces all Chinese manufactured goods to be overpriced abroad in dollars, and at the same time, overpriced in Yuans compared to foreign products in the domestic market as well.
Because the PBOC has been emboldened by this "ricochet effect" of the false rumor of Zhou's stepping down to further revalue the Yuan to 6.12 by the end of this week, on September 26, 2014, which will almost certainly force some factories to default on their loans, to lay off workers, and to close down permanently, the subtance of the false rumor must now become the substance of a real inquiry by the State Council, to take over the PBOC and wrest the control over the Exchange Rate of the Renminbi from the hands of a clique of foreign-trained economists, to make the People's Bank of China serve the people, and not be served instead by the people, and to help the Chinese people produce and not to make them unproductive.
If the State Council does not have the guts to force the Exchange Rate of the Renminbi to devalue, to at least 6.15 yuans/dollar, and preferably to 6.20 yuans/dollar, then it will have only itself to blame for the coming hard landing, if not crash, of China, Inc., which will become the laughing stock of the world for having dropped the giant rock of its foreign currency reserve on the feet holding up the body, the manufacturing sector, leading eventually to economic recession accompanied by inflation, or the death spiral of STAGFLATION. The $430 billion lost in 2010 in US Treasury values will be peanuts compared to this coming crash.