Author: abramicus

FINALLY, CHINA IS BREAKING THE CHAINS OF AN OVERVALUED YUAN!!! [Copy link] 中文

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Post time 2015-8-23 17:03:26 |Display all floors
incarnate Post time: 2015-8-23 17:01
I reckon this is the cause ...

So now....the leadership is the top enemy?

Can you repeat that in Beijing in person?




I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2015-8-23 17:12:01 |Display all floors
No winners only losers when yuan is depreciated.

The capitalist class loses
The workers loses.

Everybody loses.

It is not a cure.

It is symptomatic of the disease already present in the body.


I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2015-8-24 00:35:02 |Display all floors
This post was edited by abramicus at 2015-8-24 00:38

THE HOPED FOR ACCEPTANCE BY THE IMF OF THE CHINESE RENMINBI INTO THE BASKET OF RESERVE CURRENCIES "FOR THE PURPOSE OF ISSUING ITS SDR'S" IS MERE COSMETICS TO ANY REALLY SUCCESSFUL ECONOMY.  NICE TO HAVE, BUT NOT WORTH ANYTHING MORE THAN A LIPSTICK.

TO THROW DOWN A TRILLION DOLLARS FOR THE KISS OF THE IMF IS PURE VANITY.  

IT HAS NOTHING WITH ELEVATING THE STANDARD OF LIVING OF THE AVERAGE CHINESE.  

THE COST OF SUCH AN ILLUSION IS BORN BY THE SWEAT, BLOOD, TOIL AND TEARS OF THE PAST THREE GENERATIONS OF CHINESE WHO BUILT UP THE ECONOMY OF CHINA TO THE POINT IT OWNED 3.99 TRILLION DOLLARS OF RESERVE CURRENCY.

THE KISS OF THE IMF IS CHINA'S KISS OF DEATH . . . AND THIS IS THE REAL REASON, NO OTHER, WHY CHINA'S ECONOMY TODAY IS HEADED DOWN INTO THE ABYSS, OF ITS OWN WILL AND VANITY, TO THE END.

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Post time 2015-8-24 13:06:36 |Display all floors
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Post time 2015-8-24 13:09:28 |Display all floors
Foreigners who have deep pocket can earn riskless free money, if Yuan is allowed to be depreciated.

If you convert USD1 billion into Yuan now 2015, you get 6.5 billion yuan (1 USD = 6.5 yuan)

In 2018, assuming 1 USD = 6.10, your 6.5 billion yuan will become USD1.05 billion, making USD50 million profit, after 3 years.  This better than keeping money in the american bank which give you 0% interest.

That is why, now that China has allowed the yuan to depreciate, she should not allow the yuan to appreciate fast again, and instead should keep the rate unchange for at least 5 years.

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Post time 2015-8-24 13:54:50 |Display all floors
bushier Post time: 2015-8-24 13:09
Foreigners who have deep pocket can earn riskless free money, if Yuan is allowed to be depreciated.
...

THE REAL MATHEMATICS OF THE NEW CORRUPTION

To be clear as to who benefits and who loses from a Yuan devaluation, you need to avoid using pronouns such as "you" and "I".

Now, let us say A is a foreigner, and he invests 100 US dollars in China when the exchange rate was 7.00 Yuan/Dollar.  He gets from the PBOC 700 Yuans to buy Chinese goods, real estate, etc., with.  Or, if he is conservative, he puts the 700 Yuans in a Chinese bank, earning 3% interest per year.  Let us say his stake remains 700 Yuans, assuming the interest rate is 0%, for simplicity  Now, with the Yuan exchange rate being 6.40 Yuan/Dollar, he sells his Yuans back to the PBOC, and he gets $109.38 dollars back.  Without taking any risks, he earns a clean $9.38 from his initial investment of $100 dollars, representing a riskless profit of 9.38%.  This is why and how Yuan revaluation (i.e., overvaluation) results in a loss of dollar reserves, and is a give away to foreigners who had invested in China.  Now, remember, a huge chunk of so called "Foreign Direct Investments" come from Hong Kong and the British Virgin Islands, which has been speculated to belong in actuality to Chinese businessmen and corrupt officials who had first taken them out of China, repackaged them as foreign corporations, and then re-invested them in China.  A Yuan revaluation, from 7.00 Yuan/Dollar to 6.40 Yuan/Dollar would benefit these "foreign investors" with a bonus of 9.38% of their dollar investments in China.  Earlier in July, 2015, when the Yuan exchange rate was even higher at 6.20 Yuan/Dollar, these "foreign investors" could have gotten free bonus money equal to 12.9% of their original dollar investments!

Now, you can see why the powers that be are so adamant that the Yuan must remain overvalued, until they have converted all their Yuan assets back into dollars, taken them out of China with all the bonuses that the overvalued Yuan confers on them . . . before the final devaluation of the Yuan which cannot be avoided if the foreign currency reserves of China are depleted at that time, falling below the total value of the foreign-currency-denominated loans taken out by Chinese businesses and government agencies that have ballooned to 3 trillion dollars in the past 3 years.

So, that day of unavoidable devaluation is not far away.

But, until then, China can still preserve whatever remains of its current equity in its foreign currency reserves by devaluing the Yuan now, instead of later, and that is worth at least 1 trillion dollars.

Unfortunately, the powers that be will not allow this to happen.  They will make sure China gives up the last penny of its dollar reserves before they will allow the Yuan to depreciate.  And by then, they could not care less if it dropped to 9.00 Yuan/Dollar, because by then, all their Yuan assets would have been converted into dollars and transferred abroad into their foreign bank accounts.

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Post time 2015-8-25 14:39:39 |Display all floors
ALL PRETENSIONS TO SAVING THE ECONOMY WILL NOT WORK, UNTIL THE YUAN DEVALUES TO 6.50 OR LOWER.  ALL THESE "EFFORTS" TO SAVE THE ECONOMY ARE FUTILE, AND GOOD ONLY FOR SHOW BECAUSE THEY KNOW WELL, THEY WON'T WORK.  STOP THIS OFFICIAL PLUNDEROF THE PEOPLE'S FOREIGN CURRENCY RESERVES !





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