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Made in China products will cost more.
- Thread starter GoFlyKiteNow
- Start date
I don't think so. Being an widely preferred international reserve currency is an double edged sword. When some other countries accumulate sufficient of your currency, they can influence your currency value and in turn your interest rate and in turn many other economical factors. That's why for example, US is mixing begging and bluffing （软硬兼施）without really being in control. If US depresses its own USD further, China would suffer a loss but it's just paper loss, and well affordable. But if China dumps USD in retaliation, USD will face collapse. China would have to take losses initially of course, but could be recooped once USD bottoms out and buy back. That's an even worse scenario for US, nightmarish indeed.
for that to happen, China must first float its currency in the
International market. That require a lot of confidence and
will. China simply will not do that, for fear of market forces.
Maybe in the future, it may float its currency.
Lets see if that happens.
No the USA is the only nation in the world where a rise in commodity prices does not translate into higher net import prices because commodities are priced in US$.
Most exporters to the USA with appreciating currencies lower their prices to offset gains to the world's largest consumer market to prevent losing market share - the only market in the world to command such purchasing power - so consumers prices will rise much slower.
The US Fed is trying to create inflation. Americans have enjoyed 0.8% for some time while the rest of the world's economies are much higher so in essence trying to export inflation to China - and its working.
We are all paying a high price but America always wins.
I beg to differ. I think the subprime crisis was engineered to give a pretext for the US to go into fiat paper money inflation mode.
The FED by printing paper money at will, they are infact extinguishing the stored wealth of countries keeping the USD as a reserve currency.
Infact, I think the US is trying use hyperinflation to bankrupt all the nations on this globe. As it is, oil, gold and commodities are still priced in USD despite the instability of the dollar.
Once the prices, due to hyperinflation, outstrips the supply of USD, nations will to borrow USD, restoring stablity to the plunging dollar.
Chinese have close to 800B in US Treasuries. A 10% drop in US$ is $80B - something that China can easily absorb. I think instead of just sitting on paper loss, Beijing might use all this US$ to buy US assets. They are already making billions in US$ loans all around the world. As this surge of US$ hits US, there will be inflation.
So far US has been able to pump prime without inflation because China finances the debt by buying Treasuries and cheap Chinese goods have depressed prices.
The top 3 holders of US debt is China, Japan and US FEDs!
There will be no wholesale dumping of US Treasuries given the close economic relationship between the 2 countries.
All this concern about Yuan and talk about China just goes to show how powerful the nation has become. It is not that it is the second largest economy. But everyone can see its growth projection within the next 5 years.
So far US has been able to pump prime without inflation because China finances the debt by buying Treasuries and cheap Chinese goods have depressed prices.
The top 3 holders of US debt is China, Japan and US FEDs!
There will be no wholesale dumping of US Treasuries given the close economic relationship between the 2 countries.
All this concern about Yuan and talk about China just goes to show how powerful the nation has become. It is not that it is the second largest economy. But everyone can see its growth projection within the next 5 years.
Not true - oil prices, gold have increases because of weakening US$. So while it may be priced in US$ the weakness of US$ is reflected.
Pressures in increase Yuan will only decrease inflation within China.
Presures to decrease US$ will bring about inflation within the US. That is something Feds want. But very risky game because once inflation sets in it is hard to tame.
Made in China products will cost more and that will add to inflation in the US.
Pressures in increase Yuan will only decrease inflation within China.
Presures to decrease US$ will bring about inflation within the US. That is something Feds want. But very risky game because once inflation sets in it is hard to tame.
Made in China products will cost more and that will add to inflation in the US.
No conspiracy theory here lah. US subprime crisis due to easy credit. greenspan kept interest rate low for too long. Too much money in the system. Did not help with China's buying of US debt which added to even more liquidity.
US does not want to bankrupt the world. if so then who will buy their products?
A lot of this yuan talk is politics. ALL the BRIC countries are against US pressure to strengthen their currency. China got hit in the head because it is the largest and most powerful economy among the BRIC. But if you look at BRIC exchange rates with US$ all the same lah.
At the end of the day, China should free float Yuan - nothing to fear with that huge reserves. US should focus on its budget deficits (it cannot afford to police the world). US should recognize that it CANNOT remain as number one especially if you have a country coming at you with 4 times the population. and one that is even more "free market capitalist" than the US.
My fear is widespread trade war which will sink the global economy. There are no winners.
US does not want to bankrupt the world. if so then who will buy their products?
A lot of this yuan talk is politics. ALL the BRIC countries are against US pressure to strengthen their currency. China got hit in the head because it is the largest and most powerful economy among the BRIC. But if you look at BRIC exchange rates with US$ all the same lah.
At the end of the day, China should free float Yuan - nothing to fear with that huge reserves. US should focus on its budget deficits (it cannot afford to police the world). US should recognize that it CANNOT remain as number one especially if you have a country coming at you with 4 times the population. and one that is even more "free market capitalist" than the US.
My fear is widespread trade war which will sink the global economy. There are no winners.
Sinking the global economy is the aim. How can anyone else expect to prosper when the United States is in "pain"?
I think resetting the debt clock is now a bigger priority.
The entire world economy is focused on the US consumer who have the best products available at the best prices via fierce competition and its massive 14 trillion consumerist economy.
We have not seen much of an increase in oil since QE2 was announced, unlike other commodities that have effectively priced in the inflationary effect of printing 1 Trillion USD. When it comes to inflation the US Fed looks at core inflation - inflation other than energy/food. As 78% of US electricity is coal fired and the US is the "Saudi Arabia of Coal" we see the US demand destroying coal much the same way they have depressed Nat Gas. Nat Gas is at $3.6 per CU and The Americans pay only SGD$ 80-85 cents for one liter of petrol, which is very inexpensive.
Gold has increased because its the only form of money in the world that can't be printed the way Japan, the UK, the EU, and now the US will/have undertaken in QE.
The bottom line is the Fed is engineering inflation in the US. The target is 1.8-2% inflation from 0.8%. The consumer has gone from a negative savings rate to over 5% - which is unheard of for American consumers, and US Corporations are sitting on massive piles of cash - Microsoft has 35 Billion - for example - and they are not hiring hence QE2's domestic agenda. Something has to give.
However we know most of this money will eventually come to Asia hence the "hot money" worries in Singapore, HK, and China. This is creating asset bubbles in property, etc. In this scenario economies have 2 choices 1) Fight currency strength or 2) allow Appreciation to combat inflation. We have watched central banks around the globe incl Singapore buying dollars to no avail. We watched our reserves spent in a futile attempt.
When MAS announced tightening via appreciation last Thursday - to the surprise of other exporting nations - it was due to the Chinese Central Bank band placed upwards. The international agenda of QE2 is to force the Yuan upwards - but the Chinese will never bend to foreign pressure - THEY WILL however contain inflation, hence why we see the Yuan rising. The US knows that the one pressure the Chinese will yield to is inflation.
We can do nothing now but fight our own inflation and hope our economy's contraction slows down.
And we have the US to thank for this
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I agree...... the ballooning US debt at USD13 trillion is the future problem... the US has tried reduce spending on social security when the baby boomers hit retirement age but its not enough to recoup the continuing govt red ink... so its finger pointing to who-else but china... previously its japan...
Even the fucking self-professed "visionary" sgp pap faces the same problem despite its self-professed visions (buy high-sell low is one)...
all these will come to past...
life goes on...
like the tulipomania from holland in 1620s...
prices will always go up...
inflation will always be there...
the economy is a zero sum game...
eventually, what is most important to anyone is their good health and time.
we don't live forever...
life goes on...
like the tulipomania from holland in 1620s...
prices will always go up...
inflation will always be there...
the economy is a zero sum game...
eventually, what is most important to anyone is their good health and time.
we don't live forever...
Long way to go bro, before that can ever happen. Everybody very very quiet, about the question why China not float its currency. !
Adjusting for GDP (Purchasing Power Parity) on a per-capita basis.
China ranks #102 according to the CIA, #99 according to the IMF, and #92 according to the World Bank.
In fact, on a per-capita basis in 2009, China ranked behind Namibia, Jamaica, Belize, Thailand, El Salvador, and Albania.
And the last time the U.S. had per-capita GDP of $6,567 was back in 1932.
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