Stitch,
I shouldn't say it, but IMO your Stratford Intelligence Report is a bunch of crap.
There are no hard facts, no data, no statistics, nothing to support their 'opinion' that the yuan will be devalued except heresay and innuendo. It basically says there will be a devaluation because the Chinese leadership protests too much. With literally hundreds of articles coming out daily (like this one) about the potential devaluation, would it not be appropriate for the leadership to assure the people that it will not be?
They don't even get what's happening right. "Black market exchange of yuan is 8.9 compared to 8.6" That's an improvement - it was 9.1 last week and that was upsetting, but 8.7-8.9 is the normal blackmarket range. The only reason it goes up is articles like this one and the black market traders using those articles to scare people into trading yuan, some of them even trade yuan for yen.
"China is an export oriented economy" What? Only 20% of China's GNP comes from exports and the latest report shows that China's export surplus is growing at an adequate pace and is improving.
This is the first article I've read that ties China's foreign exchange reserves to a devaluation of the yuan. I've read it twice and still can't see the reasoning.
There's much more wrong with the article, but it isn't worth going into. If I read that China's GNP is declining and it's primarily due to a sharp decline in exports, I'll anticipate a yuan devaluation. As long as the reported GNP (accurate or not) is near 7-8% and the export growth about the same, IMO the yuan fears are baseless.
Sorry, I just get tired of reading these opinion pieces that are based on so little solid research.
FWIW,
Ron |
