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This post was edited by abramicus at 2014-8-10 10:40|
The lesson is clear, clearer than the noon day sun, that China's PMI index shot up to record levels, its GDP growth once again surged past 7.5%, and its monthly exports in July (47B) surged and imports dropped to historical levels as well, because someone with authority and wisdom required the People's Bank of China to devalue the Yuan from 6.09 in January 2014, back to an economically sustainable level of 6.18 in April 2014. The 6.09 rate was a critical lethal exchange rate that guaranteed that Chinese manufacturing products would be overpriced both abroad and domestically, against foreign products, and it was reflected in the rapid retreat of China's GDP growth rate, and its loss of foreign exchange. Clearly, China cannot go below 6.18, as it is attempting to do once again in August 2014, as if it had not yet learned its 200 billion dollar lesson. If it does, those who mandate the return to an unsustainable exchange rate should offer to pay for it with their own private monies, even if that would have been just a drop in a bucket of foreign exchange losses.
The final equilibrium sustainable Yuan/Dollar exchange rate is 6.15 to 6.18.
Below this level, it is a form of economic sabotage.