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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 378.35+2.7%4:00 PM EST
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To: TobagoJack who wrote (64290)6/20/2010 8:49:09 AM
From: carranza2  Read Replies (3) of 217646
 
I don't know if the Chinese or anyone can calculate the effect on markets of their move for this has not happened before and there are no guidelines so no history to rely upon.

Thus, being a lawyer and therefore incapable of having an original thought, I will admit to being clueless on this. -g-

This has however been percolating in my mind: China does have a lot of USD so relative increase in USD will give their USD reserves a boost. In addition, a fall in the yuan will naturally affect Chinese exports positively.

Plus, one must recall the historical reason for the peg: at the time it was instituted, the prevailing thinking was that it would keep the Rmb down because everyone and I do mean everyone thought that the USD would be going down. And it did but only for a while. It has gone up as flight to safety has taken hold so the plan to keep the yuan down has not worked. Thus, time for a new plan, one that will keep it lower.

The problem will be that Congress will go ape-manure if they ever figure out the whys and the wherefores.

This result is what smarter people, Roubini and the Father of Darkness seem to expect.

All in all, I think the moves will be so small - at least initially - that they will be inconsequential.

I am more interested on the effect on the gold market. I am truly clueless in that regard.
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