Author: abramicus

THE DATA IS IN AND THE TRUTH IS OUT + YUAN EXCHANGE RATE SINGULARITY IS AT 6.150 [Copy link] 中文

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Post time 2014-9-7 05:16:17 |Display all floors
This post was edited by abramicus at 2014-9-7 05:19
jordan_c_fan Post time: 2014-9-3 17:09
When you are using the word "garbage" as a personal attack meaning you had already lost the argume ...

Since you repeated your argument twice, it deserves a straight answer at least once.

You argue that by raising the value of the Yuan, China can afford more foreign products that it needs.  I say, NO.

No, because foreign products are priced in US dollars.  No matter what exchange rate the Yuan is pegged at on any day, the price in US dollars is the same.  While it may make an individual buyer pay less Yuans, he has to obtain the same dollars from the PBOC, whether the exchange value of the Yuan is high or low.

Therefore, to China, as a country, whose monetary authority is represented by the PBOC, what China pays, which is in dollars, is exactly the same whatever the Yuan exchange rate is.

A ring that costs $1,000 US dollars will cost China exactly $1,000 US dollars whether the Yuan/Dollar exchange rate is 6.00 or 7.00.  Making the exchange rate 6.00 Yuan/dollar only means a Chinese individual has to pay the PBOC only 6,000 Yuans in order to get the 1,000 Dollars to buy the ring with.  If the Yuan/dollar exchange rate is 7.00 Yuan/Dollar, then he has to pay 7,000 Yuans.  But CHINA PAYS THE SAME $1,000 US DOLLARS to finance the deal.  Making the Yuan revalue upwards only depletes China's foreign currency reserves faster, but it does not enable China to buy more things with the same dollars.

The fallacy is in confusing what an individual Chinese purchaser has to pay in Yuans, with what China as a country has to pay with its dollars.  The former is less, but the latter is exactly unchanged.

However, the effect of an overvalued Yuan is that foreigners selling their products for the same dollars can price their products cheaper in Yuans inside China's own domestic market, while Chinese manufacturere selling their products in the international market in Yuans have to price them higher than foreign products in dollars, which in effect shrinks their DOMESTIC and FOREIGN MARKET SHARES.

The net result is that China gains nothing from its public buying foreign goods using up its dollar reserves, but loses its market share in the domestic economy and in the global economy, killing its own manufacturing sector.  To gain nothing, and in exchange, lose everything is not genius.  It is not advanced economics.  It is TREASON.

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Post time 2014-9-15 00:56:42 |Display all floors
This post was edited by abramicus at 2014-9-15 01:01

UPDATE 12 SEPT 2014:  GUESS WHAT?

THE YUAN/DOLLAR RATE IS BACK UP AGAIN AT 6.140 AS OF 12 SEPT 2014 AT 6.140!!!

THE PBOC IS REALLY TRYING TO STRANGLE CHINA'S ECONOMY, AND THE LATEST NEWS SHOW THAT THEY ARE SUCCEEDING.

THE AUGUST REPORT CARD FOR CHINA'S ECONOMY IS A "D" (FOR "DYING").


CHINA'S ELECTRICITY OUTPUT, A VERY SENSITIVE MEASURE OF ONGOING INDUSTRIAL AND COMMERCIAL ACTIVITY, DROPPED BY 2.2%.  IT MEANS FACTORIES ARE SHUTTING DOWN THEIR MACHINES.  STORES ARE TURNING OFF THEIR LIGHTS AND AIRCONDITIONERS.  NOT THAT THEY WILL DO SO, BUT RATHER, THAT THEY HAVE ALREADY DONE SO, FOR THE MONTH OF AUGUST 2014!

CHINA'S GDP GROWTH RATE IS CRASHING THROUGH THE 7.0% LIMIT SET BY THE GOVERNMENT ITSELF, AND THOSE RESPONSIBLE FOR THIS DISASTER ARE NOT YET BEING INVESTIGATED AND QUERIED, AS IF THEIR GOLDEN WORDS ARE WORTH THE TRASH THEY ARE MAKING OF THE ECONOMY OF CHINA.

CLINTON FAMOUSLY SAID, "IT'S THE ECONOMY, STUPID."

WELL, PUTTING FOOD ON THE TABLE IS BASIC POLITICAL TRUTH.  YOU NEVER TAKE AWAY FOOD FROM THE TABLE OF THE ORDINARY MAN AND WOMAN FEEDING HIS CHILDREN.  THIS SELF-INFLICTED ECONOMIC RECESSION IS ABOUT TO GET A "CORRECTION" WITH MORE STIMULUS MONEY FOR THE FAT CATS TO BUILD BUILDINGS THAT THE ORDINARY PEOPLE CAN NO LONGER AFFORD, AND WHICH WILL COMPOUND THEIR PLIGHT BECAUSE SUCH STIMULUS MONEY ONLY MAKES NECESSITIES MORE EXPENSIVE THAN THEIR DWINDLING INCOMES CAN AFFORD.

ADDING STIMULUS MONEY INTO THIS RECESSION ENGINEERED BY THE CENTRAL BANK OF CHINA IS LIKE PUTTING A PERSON WITH A NOOSE TIED AROUND HIS NECK ON A VENTILATOR, WITHOUT TAKING OFF THE NOOSE!  THIS IS ABSOLUTE NONSENSE, AND ONLY ENSURES THAT THE CHINESE ECONOMY GETS SO BLOATED WITH AIR, THAT IT WILL NEITHER SURVIVE ITS LACK OF OXYGEN NOR THE GROTESQUE SWELLING OF ITS CHEST AND BODY.

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