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TIME FOR THE PBOC TO DO SOMETHING USEFUL - LET THE YUAN FLOAT TO 6.50. [Copy link] 中文

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Post time 2015-9-21 00:52:18 |Display all floors
This post was edited by abramicus at 2015-9-21 01:17

All the artsy pretensions of trying to rescue the Chinese economy with fiddling around with interest rates, reserve ratios, and the bravado of wasting half a trilion dollars buying back Yuans with hard-earned dollars, and giving up more than half a trillion dollars of export revenues that are being taken up for free by Japan and Vietnam, seemed to have done NOTHING, except let the annual GDP slide some more, and let some more factories shut down, and let thousands more of workers become jobless.

The ONE USEFUL THING that the monetary authorities and their political higher ups should have done, and could have done, was to let the Yuan exchange rate reach the market equilibrium where the demand for Chinese goods will drive its production, rather than where the lack of demand for Chinese Yuans will suppress its production.  Without real production, consumption only leads to the depletion of the foreign reserves of China, as is now happening every day.  Without real production, there won't be real earnings either, leading to the decline in the valuation of the entire stock market.  There is nothing mysterious about why the stock market declined.  No real earnings, how can there be real price appreciation, unless prices are driven up by speculation fueled by irresponsbile margin lending?  All margin trading will have to face the reality when earnings reports come out, and there are not enough earnings to justify the share prices.  Looking for insider trading is one aspect of keeping the market clean and efficient.  It will not solve the problem of the real companies not having enough earnings to support their share prices.  The real solution is the Deng solution.  Let production lead the way, not consumption, at least not until China can "buy" anything it needs by just printing Yuans and forcing other countries on pain of regime change, to accept the yuan as payment in full.  That is not China's national goal, so why is this hidden assumption behind all the "growth by consumption" theory being imposed on the economy from above, not recognized as the limiting factor, and Achilles Heel, of the present "re-structuring" movement?  The real solution to China's economic decline is to let the Renminbi devalue down to at least 6.50 Yuan per Dollar, just as Deng diagnosed the problem to be, one of inadequate production to support the population, and therefore, he devalued the Yuan from 5.80 to 6.37 in one stroke, and within the year, let it devalue to 8.00.  China's real economy boomed, 300 million or more people were lifted out of poverty.

With the present overvaluation of the Yuan exchange rate at 6.36, Chinese products remain overpriced in dollars abroad and in yuans at home, and production will continue to decline, foreign reservs will continue to decline, and unemployment or underemployment will continue to rise.

THIS ONE AND ONLY USEFUL THING THAT THE PBOC AND ITS POLITICAL HIGHER UPS COULD HAVE DONE REMAINS TO BE DONE.  YES, THEY SAY, THEY HAVE "ROOM FOR ACTION".  THERE IS A ROOMFUL OF THEATRICS THAT CAN STILL BE DONE, TO BE SURE.  BUT THERE IS ONLY ONE ACTION THAT WILL SAVE CHINA, WHICH THEY ARE UNWILLING TO DO, WHICH IS TO LET THE YUAN DEVALUE TO 6.50 - 7.00, WHEREVER THE MARKET DECIDES TO GO.

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Post time 2015-9-22 14:30:31 |Display all floors
THE OVERVALUED YUAN EXCHANGE RATE IS NOT A NATIONAL TREASURE, NOT A NATIONAL HERO, TO BE DEFENDED OR TO DEFEND CHINA WITH.

THE OVERVALUED YUAN IS A NATIONAL TROJAN HORSE THAT OPENS THE GATES TO FOREIGN IMPORTS AND DECIMATES CHINA'S MANUFACTURING SECTOR THAT ALONE CAN DEFEND CHINA AND MAKE INROADS INTO THE ECONOMIES OF COMPETITORS LIKE JAPAN AND VIETNAM.

CALLING THE OVERVALUED YUAN A MATTER OF PRIDE AND HONOR IS THE SAME AS CALLING A DEER A HORSE.

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Post time 2015-10-3 15:20:13 |Display all floors
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Post time 2015-10-4 06:05:52 |Display all floors
incarnate Post time: 2015-10-3 15:20
Pete Santilli Episode #1055 - Jim Willie - Global Financial War About To Go Nuclear

What is happening to China is not that of fighting and losing a global financial war . . . it is actually simpler than that . . . it is the modern equivalent of the invitation of foreign troops into China through its main fortress of Shanhai Guan by Wu Sangui, the ceding of 200 million taels of silver to Japan after ceding Korea and Taiwan by Li Hongzhang, and the presiding over the subjugation of civilian society to Japanese aggression by Wang Jingwei, all rolled into one spear-thrust through the heart of the Chinese economy - its now bleeding and dying manufacturing sector, whose products are now overpriced in dollars abroad and in yuans at home due to the constricting Boa effect of the overvalued Yuan exchange rate.

This is a national disaster.

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Post time 2015-10-4 06:18:27 |Display all floors
This post was edited by abramicus at 2015-10-4 06:24

You can see the result of this self-strangulation Yuan overvaluation policy in foreign affairs . . . nobody takes China seriously any more . . . just give her pro forma courtesy treatment without any substantive agreements on anything of value.  Why should they, when China's leadership has shown its extreme gullibility in accepting the Consumption_Service_ForeginDebenture_Model that is more certain than any foreign aggression to reduce China to being a Poor and Sick Man of Asia in just a matter of one or two years?  What do you say to someone who is preparing the noose, fitting it across his neck, and telling the world, "Watch me defy gravity?"  They must all be wondering, how did China get so dumb so quickly, overnight?

In fact, they must be wondering why China is supporting Japan with hundreds of billions of dollars of forfeiited export revenues by refusing to engage Japan in a currency war that was and is being waged by Japan on millions of Chinese factories, hundreds of millions of Chinese workers, and its fledgling middle class.

When did China contract its Alzheimer's Disease?



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Post time 2015-10-4 09:32:35 |Display all floors
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Post time 2015-10-4 11:55:00 |Display all floors
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