Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (25569)	3/14/2005 1:23:53 AM
From: RealMuLan	Read Replies (4) of 116555

>>[are we wrong about the timing of all this with all the hot money? This statement can have money flowing into China. Mish] << Mish, I think what Wen meant to say is China will take action when people the least expect. So as long as this RMB revalue thing is in the headline, there will be no action. And revalue could happen in a year or so depending how the hot money behaves, but free float will not happen for at least 3-4 years from now. On the other hand, those big amount of foreign reserves are really giving China's CB a headache. I read that Guo ShuQing (the head of China's Foreign Exchange Bureau) suggested to use up to 50% of reserves for strategic oil reserve. The problem with his suggestion is that this will further up the world oil price. BTW, I read that plenty of hot money already left HK now, so HK may have to up their interest rate. As for the hot money within China, I think most of them already put on real estate investment. Some overseas people now buy up a couple of dozen even hundreads of apartments in some Chinese cities, and the Chinese gov. is planning some crack down on this type of speculation.

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