Lumacom Chronicles - a study of mania and madness Message Board

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Non-Tech : Lumacom Chronicles - a study of mania and madness

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To: ild who wrote (80)	11/7/2003 9:52:17 PM
From: TobagoJack	Read Replies (1) of 113

my feel is that the PRC central bank is holding the USD party together by chanting 'stability first' while private sector is withdrawing out of USD, so that when, eventually, central bank pulls the rug out by way of a wider trading band for USD/RMB or repeg at higher value or peg to currency basket, the little people and big people in country are not hurt on the savings aspect of USD hoard. The trade flow aspect of USD/RMB is actually not much of an issue for China. The US will buy what it needs to buy from China regardless of any 5-20% currency shift. Asian currency shift to the USD will hurt the Toyota Lexus appetite of the US consumers, but not so much for shoes, nails, hand tools, simpler electronics, etc, so on and so forth. The reason Chinese outfits do not buy as much from the US as opposed to Japan/Europe is because many non-S&P500 US companies are actually not that export-friendly (no sustained customer contact, intermittent service, etc) coupled with less than friendly US visa, export license and exim financing policies.

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