Author: abramicus

DENG MOVED CHINA FORWARD WITH HISTORIC DEVALUATION FROM 5.74 TO 6.37 IN 1992 [Copy link] 中文

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Post time 2015-1-13 15:20:09 |Display all floors
CHINA'S BALANCE OF PAYMENTS "ERRORS AND OMISSIONS" REPORTED TO TOP $300 BILLION DOLLARS, ROUGHLY ABOUT 8% OF ITS FOREIGN CURRENCY RESERVE.

QUESTION:  WHO IS SPENDING THOSE HARD-EARNED DOLLARS TO BUY CHINESE YUANS THAT CHINA COULD PRINT FOR THE PRICE OF PEANUTS?

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Post time 2015-1-19 01:39:41 |Display all floors
The PBOC needs to wake up that its policy of overvaluing the Yuan is denying China hundreds of billions of dollars of export earnings every six months.   All this extra export dollars that China is leaving on the table is being picked up by Japan and Vietnam, who use these same dollars to arm themselves and invade Chinese islands.  Not very wise to keep overvaluing the Yuan, which should be trading at 6.50 Yuans per Dollar without PBOC intervention.

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Post time 2015-1-21 07:14:33 |Display all floors
China's annual GDP growth rate for the fourth quarter of 2014 fell below the benchmark and self-designated target of 7.5%.  Although there is still growth, a RED LINE has been crossed, not so much for want of effort, but so much for failure to remove the OBSTINATE BARRIER TO MANUFACTURING REVENUES - both domestically and internationally - of the OVERVALUED YUAN.  The PBOC should step up to the plate and admit its mistake, and not try to paper it over by lowering the interest rate, but simply STOP BUYING UP YUANS WITH ITS RESERVE CURRENCY DOLLARS from now on, until the Yuan/Dollar exchange rate hits 6.75.  

CHINA HAS LEFT TOO MANY HUNDREDS OF BILLIONS OF DOLLARS OF LOST EXPORT REVENUES ON THE TABLE BY OVERVALUING THE YUAN, AND ALLOWING JAPAN TO PICK THEM UP FOR FREE, WHICH JAPAN IS DOING POST-HASTE BY DEVALUING THE YEN, IN THE EXACT OPPOSITE DIRECTION AS THE PBOC.

THIS ADDS INSULT TO INJURY AND MUST STOP.

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Post time 2015-1-21 08:38:27 |Display all floors
abramicus Post time: 2015-1-21 07:14
China's annual GDP growth rate for the fourth quarter of 2014 fell below the benchmark and self-desi ...

Who wants their currency devalued?

Certainly not the average salaried worker.




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 2015-1-21 10:56:09 |Display all floors
Revolutionar Post time: 2015-1-21 08:38
Who wants their currency devalued?

Certainly not the average salaried worker.

Nobody wants their currency devalued.  It seems as if their purchasing power is reduced unfairly.  But, if they understand that an overvalued currency reduces their earning power even more unfairly, in the form of fewer jobs, less well paying jobs, then they will understand that there is an optimal exchange rate, where their earning power is increased with only a little loss in their purchasing power for foreign products, while their purchasing power for domestic products in increased quantitatively, in that they can buy more at the same price.

Thus, we must distinguish between "devaluing the Yuan" which is good for the average wage earner, as the current exchange rate of 6.20 is preventing Chinese workers from increasing his earning power (reducing the GDP annual growth rate and pushing it back to 7.4%), and "undervaluing the Yuan" which makes imports of necessary raw materials and energy so expensive that factories have to shut down, that may occur if the exchange rate is devalued to 8.00 Yuan/Dollar.  But, "devaluing the Yuan from 6.20 to 6.50" is not "undervaluing the Yuan" - rather, it is "correctly valuing the Yuan" which is necessary to keep China's workforce employed and to keep its earning and purchasing power working together to increase the standard of living of the average Chinese man and woman.  The exchange rate of 6.20 Yuan/Dollar fails in this mission, while the exchange rate of 6.50 Yuan/Dollar will succeed in increasing both the earning and the purchasing power of the Chinese people.

It is time for the PBOC to admit its grave mistake and correct its exchange currency overvaluation disaster.

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Post time 2015-1-21 10:59:45 |Display all floors
Moreover, the country that benefits the most from this disastrous exchange rate policy of the PBOC is China's implacable avowed enemy, Japan, that has adopted the opposite policy of devaluing the Yen, to take FULL ADVANTAGE OF THE MISTAKE OR LARGESSE OF THE PBOC, to the tune of hundreds of billions of dollars of lost income to the manufacturing sector of China, each year.

In this sense, overvaluation of the Yuan is equivalent to aiding the Japanese enemy, and thus, is treason.

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Post time 2015-1-21 11:41:56 |Display all floors
abramicus Post time: 2015-1-21 10:59
Moreover, the country that benefits the most from this disastrous exchange rate policy of the PBOC i ...

the proper job of a government is to protect its currency.


not devalue it.

a gradually improving  currency is reward for good governance. ......


a devaluation is the price of failure.


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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