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WHAT REASON FOR PBOC TO KEEP THE YUAN AT 6.20 CNY/USD?   [Copy link] 中文

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Post time 2015-5-3 07:31:40 |Display all floors
This post was edited by abramicus at 2015-5-9 17:43

What, if any, is the reason for the People's Bank of China to keep the Yuan overvalued at 6.20 CNY/USD?

It has caused nothing but a contraction of the manufacturing sector that went into reverse gear for the past three months, barely scraping by March with 50.1 PMI Manufacturing Index, and falling down in April with 48.9, where 50 is the cut-off between deflation and growth.

Is it in order to overcome the opposition of those who are not part of the overvaluation clique to lower interest rates and reduce banking reserves, which are both holding back inflation?

Why should China trade-off low inflation against low production, when in reality, the solution is neither, but merely for the PBOC to stop buying up Yuans with its 3.8 trillion US dollars reserve, which has also caused a DECREASE in China's foreign currency reserves, a loss of 200 billion from China's peak reserves, plus many more months of NO INCREASE, which are LOST OPPORTUNITY COSTS TO THE ECONOMY OF CHINA, worth another 300 billion dollars.

Where are all these lost and missing dollars going?

Not to any Chinese corporation.  The most likely recipient of this mishandling of the exchange rate policy of China is Japan, which has been devaluing the Yen and absorbing and taking over China's export market at the same time, including even China's own domestic market, as Japanese goods get to be underpriced against China's own products.  Time for change.



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Post time 2015-5-9 17:03:38 |Display all floors
TOYOTA JUST CELEBRATED ITS STUNNING YEAR ON YEAR PROFITS FROM A WEAKER YEN JUMPING 46% IN THE LAST QUARTER, WHILE CHINA IS CELEBRATING ITS YEAR ON YEAR DECLINING EXPORTS OF 6.4%, AND A CONTRACTING MANUFACTURERS PMI INDEX NOW BELOW 50, AT 48.9, DUE TO ITS OVERVALUED YUAN.

AT THE RATE CHINA IS MAKING PROGRESS IN RESTRUCTURING ITS ECONOMY ACCORDING TO IMF EDICTS, THERE WON'T BE A CHINESE ECONOMY TO WORRY OVER IN 10 YEARS.

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Post time 2015-5-19 16:30:16 |Display all floors
As of this moment, the Yuan/Dollar exchange rate remains at 6.20 while the Chinese factories continue to close, workers continue to be laid off, and the foreign currency reserve of the country continues to shrink, and export earnings are lost to Japanese manufacturers.

The state of the nation is in a state of self-strangulation, or suicide by hanging, courtesy of its foreign-trained economic hit men.

The foreign powers are winning hands down.

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Post time 2015-5-19 16:41:16 |Display all floors
So maybe the solution is to let currency float freely and then the market can set the price

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Post time 2015-5-21 14:00:00 |Display all floors
futsanglung Post time: 2015-5-19 16:41
So maybe the solution is to let currency float freely and then the market can set the price

Float freely, like the USD and Euro?  The same two currencies that have been manipulated by at least five major brokerages or banks to benefit not the market but the market makers, who have been fined hundreds of billions of dollars without denting their spreadsheet?  China can find the market without using the marketmakers, like the foreign banks and brokerages, or the IMF which still insists China's Yuan is undervalued, when its manufacturing capability is shrinking, it exports has dropped, and its foreign currency reserves are decreasing, it still insists the Yuan is undervalued, to the relief of its cronies in the Chinese banking hierarchy who have been dutifully strangling the Chinese manufacturing sector by 0.001 yuans at a time, keeping the Yuan exchange rate at a mechanical ventilator setting of 6.20 Yuans/Dollar, just enough to make China the SICK MAN OF ASIA AGAIN, worse yet, one dependent on its executioners for every gasp of air they will allow to keep it alive one more day, with cuts in interest rate and reserve ratios that only bring about incremental inflation that will eventually finish off the Chinese people if the manufacturing collapse does not.

It just shows that this currency cartel inside China is deeper and wider than just in its central banking system.  It will take another Deng to save China from the same policies that will generate same kind of inflation used to stoke the TAMincident.  

You weep to see China's economy hogtied like it is right now, waiting for the butcher's coup d'grace.



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Post time 2015-5-21 14:01:16 |Display all floors
futsanglung Post time: 2015-5-19 16:41
So maybe the solution is to let currency float freely and then the market can set the price

Float freely, like the USD and Euro?  The same two currencies that have been manipulated by at least five major brokerages or banks to benefit not the market but the market makers, who have been fined hundreds of billions of dollars without denting their spreadsheet?  China can find the market without using the marketmakers, like the foreign banks and brokerages, or the IMF which still insists China's Yuan is undervalued, when its manufacturing capability is shrinking, it exports has dropped, and its foreign currency reserves are decreasing, it still insists the Yuan is undervalued, to the relief of its cronies in the Chinese banking hierarchy who have been dutifully strangling the Chinese manufacturing sector by 0.001 yuans at a time, keeping the Yuan exchange rate at a mechanical ventilator setting of 6.20 Yuans/Dollar, just enough to make China the SICK MAN OF ASIA AGAIN, worse yet, one dependent on its executioners for every gasp of air they will allow to keep it alive one more day, with cuts in interest rate and reserve ratios that only bring about incremental inflation that will eventually finish off the Chinese people if the manufacturing collapse does not.

It just shows that this currency cartel inside China is deeper and wider than just in its central banking system.  It will take another Deng to save China from the same policies that will generate same kind of inflation used to stoke the TAMincident.  

You weep to see China's economy hogtied like it is right now, waiting for the butcher's coup d'grace.



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Post time 2015-5-21 14:06:34 |Display all floors
Float freely, like the USD and Euro?  The same two currencies that have been manipulated by at least five major brokerages or banks to benefit not the market but the market makers, who have been fined hundreds of billions of dollars without denting their spreadsheet?  China can find the market without using the marketmakers, like the foreign banks and brokerages, or the IMF which still insists China's Yuan is undervalued, when its manufacturing capability is shrinking, it exports has dropped, and its foreign currency reserves are decreasing, it still insists the Yuan is undervalued, to the relief of its cronies in the Chinese banking hierarchy who have been dutifully strangling the Chinese manufacturing sector by 0.001 yuans at a time, keeping the Yuan exchange rate at a mechanical ventilator setting of 6.20 Yuans/Dollar, just enough to make China the SICK MAN OF ASIA AGAIN, worse yet, one dependent on its executioners for every gasp of air they will allow to keep it alive one more day, with cuts in interest rate and reserve ratios that only bring about incremental inflation that will eventually finish off the Chinese people if the manufacturing collapse does not.  China can find the market clearing exchange rate like any honest market maker could easily do it, which is to devalue the Yuan until exports and imports rise to a new equilibrium - rise and equilibrate - that is the market price of the Yuan.  You don't need seedy brokerages to rig the exchange rate of your own currency and use that as your benchmark.  The fixing of the 4 PM Reuter's euro/dollar exchange rate only permitted the customers to be fleeced by the market makers, and is demonstrated to be totally useless as an indicator of the equilibrium point of supply and demand.  The "fix" is actually easily manipulated with just a few hundred million dollars and should be junked.

It just shows that this currency cartel inside China is deeper and wider than just in its central banking system.  It will take another Deng to save China from the same policies that will generate same kind of inflation used to stoke the TAMincident.  

You weep to see China's economy hogtied like it is right now, waiting for the butcher's coup d'grace.

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