Hello Mish, See this Message 19803115 .
Playing it out, as in expanding along the same logic, China's trade deficit with world will increase as China exports less raw materials/energy and imports more of the same, even as its domestic economic growth slows (as opposed to reverses course) but export stays healthy. Interesting set of cards to be played out ;0)
At some point, folks may start writing about Yuan devaluation against the Dollar, even as the Dollar struggles against the forces of Yen, Euro, GBP, AUD, CAD, et cetera, so on and so forth, onmegod ... so interesting ... and if China then floats its currency RMB, will the Japanese then start snarfing down RMB and the USD in dollops and tranches ;0)
The Japanese would buy USD to support US consumption of Japanese products made in China-based Japanese factories built with RMB bought by the same Japanese :0) They would buy the RMB also to control the decline of the RMB thus giving Japan the time to adjust its production structure around Asia, and they would lend Japanese Yen so that the Asia-owned China-based factories of the Taiwanese, Koreans, ... will continue to buy some Japanese equipment given the Japanese financing :0)
Interesting times then, no?
Chugs, Jay |
