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Strategies & Market Trends : Currents of Currency

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From: Ahda	8/11/2015 6:04:25 PM
	of 594

China's devaluation of the Yuan is rather like the games Japan tried to play to increase their own economy stimulate so it begins.. Because Chinas growth started in exports by dropping the Yuan 2% she decreases the price of her products 2% Please buy more from us. There is a problem with supply as you can end up with deflation because of over supply. The problem becomes yet greater when you realize that the job market is a major driver in the economy and the middle class was the stabilizer of the economy China began her entrance into a world producer by means of inexpensive labor recently she has run into a problem of lack of cheap labor due to rising expectations of her people and decreasing gross figures which can end up as decreased profit. To complicate problems you now have technology replacing some of that cheap labor. Exchange rate of currency will vary but more so when there is an actually act of decrease of value of currency. It bodes well for China's foreign sales market perhaps but that 2% reduction can cause a decrease in employment in the importing nations. India has become very world competitive so China's move might give her a little edge. Does decreasing currency value work -- not really as Japan played the game of selling and buying her own currency in order to make her products a better buy to the rest of the world. . China did not reduce currency value indirectly but directly. i respect her no games we lower our currency we hope that stimulates the economy. The drop in her currency has very little impact if any on her internal currency but if the price of commodities increase it can have a 2% increase or price in commodities she buys which is a negative impact on her economy. China's move can offset product inflation in the US. Chinas move can also reduce the price of any Yuan tied debts China has in the US or any other currency that the Yuan has depreciated in exchange with. Wages here still remain the largest determinant of inflation. It appears that RE is being looked at as a potential investment as I think some of our stocks are way to futuristic in value. This is a world move as we all search for future value. I do hope this does not create enthusiasm akin to of 2006.

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