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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (36494)7/21/2005 2:56:37 PM
From: ild   of 110194
 
Date: Thu Jul 21 2005 13:41
trotsky (Hambone) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
my bet is the pressure won't be on Walmart, but rather on Chinese producer/exporter margins. in any case, this is just a token repeg..more cosmetic than anything else ( but obviously seen only as a first step ) . were the Yuan to truly float freely, it is far from assured that it would actually rise. stuff doesn't rise merely because everybody says so. imo the large amount of hot money that waits for the full float to produce a large profit will cause the opposite reaction of that now generally expected. otoh, piecemeal repegging DOES push the Yuan up, and puts a lot of upward pressure on other Asian currencies.

Date: Thu Jul 21 2005 13:31
trotsky (RIP@'baked into the cake') ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
not entirely. it wan't baked into the Yen exchange rate for instance. since speculators recently held one of the largest Yen futures net short positions of the past decade, they were obviously caught napping.
of course this mini-revaluation will cause even more pressure from speculative funds flowing into China, as everybody will be thinking 'this is just the beginning'.
also, while it's not yet discernible with precision what they will be, it is almost certain that the law of unintended consequences will now strike.
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