Doug,
What if China devalues its currency.....and nobody cares??
Remarks in no particular order:
China will not devalue unless yen collapses. By then, it may indeed just be symbolic rather than anything else.
Intra Asia trading is already a complete mess. Demand for imports, aside from needed commodities, has tumbled. With a weaker yen, a devalued RMB, you can bet the Won, Ringit etc will all drop. I wonder how they are going to be able to afford to buy anything from AMAT and other high ticket items.
At one point, all multi-nationals were counting on the up and coming billion+ consumers in China, the close to billion in India, the rising little tigers, etc to buy hamburgers, lipsticks, Coca Cola etc as the new growth arena. Looks a little overly optimistic here.
Is Europe really that strong? I have not spent as much time researching that part of the world but I really have not read anything that positive. Every time someone ask Bill Clinton about Monica, his response has always been "the economy is strong" but is the US economy that strong? Is it strong enough to sustain the growth rate corp USA had been enjoying the last few years?
China needs 8% GNP growth. Chances for meeting that goal is almost nil. Unemployment is high and about to explode. Thousands have died from recent floods and who knows how much crop damage was done to the food belt of China.
Therefore, answering your question in a round about way, I suspect that if China devaluates the RMB, the world will notice.
Ramsey |
