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NO TIME TO WASTE WAITING TO DEVALUE THE YUAN!
This post was edited by abramicus at 2013-4-29 17:06|
The choice of what is an international reserve currency goes beyond mere economics. It is rooted in politics, and particularly, in military politics. The ultimate guarantor of the interconvertibility of one's currency against another is not just the productivity and natural resources one has, but one's ability to effect "regime change" on any country that rejects its interconvertibility, using any pretext, such as human rights for minorities, for dissidents, and for religious redcoats. In this day and age of the universally mendacious media, any excuse can be found and popularized to effect "regime change" on any country that refuses to accept one's currency for any reason. Sanctions and embargoes are par for the course to force the uncooperative countries to accept one's fiat currency or face scarcity of resources, especially energy and food, that it needs but lacks foreign currency to buy.
Unfortunately for China, these methods of coercion are not part of its repertoire, and therefore, the Chinese Yuan can only be an international reserve currency by consent, which is unlikely to come from its competitors and enemies. Thus, it can only be regional or limited to its allies, but it cannot be an international reserve currency.
To hold back retaliating against Japanese devaluation of the Yen, which uses the decrement in Chinese exports to boost Japanese exports, and thus Japanese earnings that can be used to pay for its militarization, courtesy of China, in the vain hope of gaining more international support for the Yuan as an international reserve currency is naive at best, and foolish at worst. In any event, it is a fool's errand, pursuit of which rather than the rebalancing of the Yuan against the Yen with immediate devaluation, will cause Chinese exports to die, and Japanese exports and factories to prosper. It is thus IRRESPONSIBLE for the Chinese Central Bank to procrastinate about what to do in response to the unilateral Japanese hostile devaluation of the Yen. It is also RECKLESS, in that further delay only loses billions of dollars of exports every week, and forces closures of Chinese factories, raises unemployment, and in the context of an intentionally jacked up domestic demand, runaway inflation - in short, STAGFLATION due to Chinese Central Bank's conscious choice to not devalue the Yuan, in the hope of getting the approval of China's global competitors and haters, to have the chance of basking in the glory of the Yuan becoming accepted as an international reserve currency. This is truly vain and delusional, and must be immediately corrected.
Chinese workers cannot wait. Chinese factories cannot wait. China's defense industries cannot wait. And if the Chinese Central Bank insists on waiting, it can do so by lining up for a job at some foreign central bank, as a consultant or servant, but it has no job to do in China.
Do not let the inaction of the Central Bank kill off Chinese productivity even for just one day. Fight! Victory is just around the corner if China devalues the Yuan overnight to 1:8. Japan will reel and stumble. Its Wehrmacht will be impossible to complete, and China's sovereignty over Diaoyudao and the South China Sea islands will never be challenged by the Japanese pirates ever again.