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THEY ARE JUST HURRYING UP THE LOOTING OF THE 3.5 TRILLION CHINESE CURRENCY RESERVE.|
The rise in value of the yuan is not due to foreigners valuing the yuan more than ever before. Far from it. although the IMF has claimed that the Yuan was overvalued all these years, it predicted in 2012 that the yuan would devalue to 6.7 in around 2017. What do you call a person who says your products are underpriced, but wll nevertheless naturally drop futher in price? Either he is an idiot or he is a liar, or both.
The rise the exchange rate of the yuan is propelled by the Chinese central bank paying even more dollars for anybody willing to sell it back the yuans it had printed before. In 1997, this was an emergency measure to prop up the value of the Yuan against depreciation, when foreign speculators borrowed billions of dollars worth of yuans and were dumping them in the market, making it too expensive for China to import its raw materials, when it was struggling to become a manufacturing powerhouse. In 2013, this is a ROUTINE DAILY MEASURE by the Chinese Central Bank which serve no useful purpose, except to force ALL manufactured products of China to be OVERPRICED in dollars abroad and in yuans at home, all at the expense of China's own foreign currency savings or reserves. Opposite in direction to the 1997 economic policies of Deng and Zhu, the current exchange rate policy of the PBOC are designed to crush China's factories, enrich foreign investors when they repatriate their earnings and capital abraod, and importers of foreign goods. It is a sure recipe to cause China's manufacturing sector that has just been pumped up with liquidity and debt to stave off the 2008 financial meltdown, to become insolvent because it could not sell its products abroad or at home. In short, when you pump up a balloon, and then clamp down on its safety valve (sales of products), you can only expect one result. You don't have to be an Einstein to know it will explode.
If the captains of banking and exchange rate policy believe in IMF's prognostications and advice, which we have shown to be either stupid or dishonest, then they are either incompetent or disloyal to the people they serve.