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This post was edited by abramicus at 2015-1-19 01:34|
MAYBE, THAT IS WHY THE PBOC HAS REFUSED TO DEVALUE THE YUAN, TO EARN MORE EXPORT DOLLARS, ON WHICH IT IS ALREADY LOSING 80 BILLION DOLLARS PER YEAR IN LOST PURCHASING POWER.
In this, clear thinking is needed.
Failure to devalue the Yuan, is worse than earning devaluing export dollars. Failure to devalue the yuan is failure to earn any export dollars at all. And it is also means being forced to draw down on China's dollar reserves, without having changed the fact that in order to survive in the new world order's economic system, China needs the dollars to import its energy and raw materiail needs. In effect, China is refusing to pay an "international reserve currency tax" to the dollar or euro issuing countries, in the form of inflationary loss of purchasing power, but the price is to being unable to earn those export dollars or euros to begin with. Failure to earn export dollars leads to a faster loss of China's dollar reserves, in raw numbers, during which time, China continues to lose nearly 8% of the purchasing power of the remaining dollars it holds, due to both inflation and ongoing covert or overt QE. Failure to import necessary raw materials and energy to run China's massive manufacturing sector results in domestic factory failures, unemployment, and social instability.
Refusing to save in dollars, therefore should not result in refusing to earn dollars, because the REALITY is, China cannot import 90% of what it needs without using dollars. If so, refusing to devalue the Yuan on the basis of refusing to save in dollars is no longer a valid argument. It is being penny-wise and dollar-foolish, literally, and should be changed as a standard PBOC policy since the end of June 2010, which has been one of 3% appreciation of the Yuan against the Dollar, even using hard-earned dollars to buy back Yuans that from the standpoint of the PBOC, is worthless, as it can print them for peanuts any day.