Hello Snowshoe, <<I don't get it. How can China manage to keep it's currency pegged to the USD in this day and age? This seems like quite a distortion of reality>>
... what ever do you mean?
I mean, look at the situation this way, by all right, China's currency should be devaluing against the USD :0) given that the country has huge paper currenct printing needs:
(a) 300 years of pentup demand for infrastructure
(b) 200 years of unsatisfied needs for housing
(c) technically bankrupt banking and insurance constructs
(d) practically non-existent social welfare net
(e) ...
... the list goes on and on, and so a meaningful and sustained appreciation of the Yuan is not in the cards.
To engineering a temporary appreciation of the Yuan, Chinese central bank would have to sell USD and buy ... what ... Euro, Yen, AUD, CAD, gold, oil fields, timberlands, aircraft carriers, rockets, Argentina, Zimbabwe?
If if it does, what would the world's reaction be?
Would Europe, Japan, USA be in favor of any of the above?
Besides, what does the US make that China is in competition with? Cisco routers? Corn? At what level of bilateral and multilateral exchange rates will the US be on the level with Chinese manufacturing of plastic toys or shoes?
So, the wishful thinking is just that, wishful.
The US cannot want to have a USD-centered and Washington dominated global empire and still want to exclude 1.x billion USD-space folks.
Ah, the burdens of empire is very weighty ;0/
Chugs, Jay |
