Author: 468259058

China has lost $271.1 Billion through FR during the past 7 years [Copy link] 中文

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Post time 2011-5-6 21:36:57 |Display all floors
I think it's a stupid explanation from the answer of state administration of Foreign exchange of China.

Mesured by gold price, measured by crude oil price, measured by the prices of other commidities, measured by Chinese yuan, China's foreign reserve did suffer a loss. Why don't they acknowledge this fact?

It's the price to control, to manipulate, to stablize the exchange rate.

the key question is:
Is this price (this loss) worth or not?
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Post time 2011-5-6 23:51:23 |Display all floors
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Post time 2011-5-7 10:46:49 |Display all floors

A story from Chinese forum.

An American took $5 million to China and exchange into 40 million Chinese yuan in 2008.  

He has eaten, and has travelled, and ... with 10 million Chinese yuan during the past 3 years.  

Last night, He use the rest 30 million Chinese yuan exchanged back into $5.3 million.   

That is to say, he enjoyed 3-year vacation and earned $0.3 million interests in China with $5 million.



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Where is money from?

Chinese foreign reserves, or any else?
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Post time 2011-5-8 19:55:37 |Display all floors
Import/GDP =0.25
Export/GDP =0.25

I have copied the major consumption and poduction of Chinese import and export in another thread.

Foreign trade is very important for Chinese economic development.

The prices of products for export would fluctuated dramatically without a strong and stable currecy.
China won't afford the necessary products, such as crude oil, through import without enough foreign reserves.

How much foreign reserves could protect Chinese currency from attacking by global speculators? like George Soros in the case of Hong Kong dollar and the case of U.K pound?
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Post time 2011-5-8 20:35:48 |Display all floors
George Soros is a Hungarian-American financier, businessman and notable philanthropist cosued on supporting liberal ideas and causes. He became known as "the man who Borke the Bank of England".

Soros recieved a Bachelor of Science in Philosophy at the London School of Economics.

Currency speculation
I
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Post time 2011-5-8 21:39:46 |Display all floors
Originally posted by bushier at 2011-5-8 09:34
China has some of the most talented economist and financial experts in the world such as Henry Liu CK, Andy Xie and Andrew Sheng. ...


I read Andy Xie a little in Mainland Chinese media. I know little about the rest 2.

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Dollar hegemony is the hypothesized monetary hegemony of the US dollar in the global economy. Henry C.K. Liu popularized the term in a widely circulated and quoted article "Dollar Hegemony has to go".

The term describes a geopolitical phenomenon of the 1990s in which the U.S. dollar, a fiat currency, became the primary reserve currency internationally. Three developments allowed dollar hegemony to emerge over a span of two decades.

The Bretton Woods system established in 1945 a fixed exchange rate regime based on a gold-backed dollar. The US did not view cross-border flow of funds necessary or desirable for promoting trade or economic development. Due to negative consequences accruing due to the Triffin dilemma, in 1971 President Richard Nixon abandoned the Bretton Woods regime and suspended the dollar's peg to gold as U.S. fiscal deficits from overseas spending caused a massive drain in U.S. gold holdings.
The second development was the denomination of oil in dollars after the 1973 Middle East oil crisis; see petrodollars.
The third development was the emergence of deregulated global financial markets after the Cold War that made cross-border flow of funds routine.

A general relaxation of capital and foreign exchange control in the context of free-floating exchange rates made speculative attacks on the exchange rates of currencies a regular occurrence. These three developments permitted the emergence of dollar hegemony in the 1990s. At the end of the 20th century it was for the most part undisputed that the US dollar is the most important reserve currency in the world. As of 2007, it still has the largest share (65.7%) of foreign reserve holdings, with the euro some distance behind at 25.2%. However since 2000, the dollar share is falling and the euro share is rising, though the trend is very gentle.
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Post time 2011-5-9 03:47:26 |Display all floors

Currency speculation

The US is attempting to gain control not only through currency manipulation but also forcing China to open up to more US financial scam schemes and privatization of public industries. the printing presses having been running 24/7 cranking out useless dollars to flood the world with worthless paper in exchange for industries and raw materials.
Meanwhile the US is on the verge of revolution that will turn into full fledged class warfare because most of the population is armed. With 20 to 22 % of the population unemployed and millions of people homeless including women and children the situation is being more explosive day by day.
The military attacks in North Africa and the Middle East are designed to sustain the only major industry left in the US the armaments makers, and steal the natural resources they were prohibited from buying with US paper.
The Osama event that dominated the news for days was just another attempt to divert public attention from the homelessness and despair.
China is now the richest country in the world and a primary target; beware. Wars keep the US public preoccupied and there is no end in sight to the number of countries that will be attacked.

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