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This post was edited by abramicus at 2014-12-4 22:18|
The Market-Friendly Devaluation of the Renminbi Will Both Benefit China's Economy And Defeat Japanese Militarism
The Economic Hit Men trying to strangle China's manufacturing sector with a self-induced revaluation of the Renminbi to astronomic levels, using China's own massive foreign currency reserve to buy up its own Yuans with Dollars, essentially writing off every dollar with the purchase of 6.11 yuans, while denying its factories and their workers their ability to sell their products, due to their being overpriced in yuans in the domestic market, and also overpriced in dollars in the foreign markets, had to loosen their chokehold for a while, allowing the manufacturers to breathe a gasp of air by lowering the interest rate by 25 basis points. This is to save their own necks because they have FAILED TO MEET THE GOAL ESTABLISHED BY THE CENTRAL GOVERNMENT OF MAINTAINING THE ANNUAL GDP GROWTH RATE AT 7.5% in October and November this year. Moving the goal post is not the solution. Removing the incompetent or foreign-beholden setters of the Renminbi Exchange Rate and stopping the PBOC from ever exchanging China's hard-earned dollars and euros for its own currency that it could have printed for 0.001% of the cost of the dollars or euros spent in buying them, is the REAL SOLUTION. Lowering the interest rate may temporarily devalue the Yuan, but it creates another problem, that of a self-induced inflation, in exchange for the self-induced recession. This is a false dichotomy, a false choice, because neither has to happen to China. China can walk right out of its self-imposed "EITHER RECESSION OR INFLATION DILEMMA" by simply stopping the illegal transfer of China's hard earned foreign currency reserve to foreign central banks and investors through the PBOC buying up Yuans with Dollars.
Another major political windfall of adopting the correct monetary policy is that the PBOC-supported Japanese economy will then shrink and collapse under the weight of its own mismanagement and national debt, which will end the misuse of Japanese savings to enrich the new generation of Japanese industrial militarists. The artificial devaluation of the Japanese Yen by the BOJ will become ineffective as China responds in a market-friendly manner by a parallel devaluation of the Yuan, which stops the flow of Chinese dollars into Japanese banks and businesses.
As Abe has called a snap election, China must act with resolve and decisiveness, in simply ALLOWING the market forces to devalue the Yuan to its true equilibrium point of between 6.50 to 7.00, and the problem of Japanese militarization and repeat conquest of Chinese territories will implode and disappear like a ghost in the night. If the West is willing to put extreme economic pressure on Russia over a Ukraine it does not own, why should China not allow the market to naturally devalue the Yuan, until unnatural buildup of Japanese militarization becomes unsustainable and dies a natural death, which will benefit both the peoples of Japan and China???