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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (3859)	8/26/2003 6:02:32 PM
From: Sergio H	Read Replies (1) \| Respond to of 37387

Crossy, thanks for the clarification. From my understanding, Greenspan and other U.S. based voices have complained to the Chinese about a need to revaluate. Chinese monetary valuation is an international problem as well as as a Chinese problem. Why? The Chinese do not share the same economic growth rate, inflation rate, PPI, CPI, etc. as the U.S. All of these factors affect the value of the U.S. dollar. Since the Yuan is fixed to the dollar, it does not reflect the actual economic pressures of China unless there is periodic revaluation. The artificial currency valuation is keeping Chinese exports cheaper, but the currency influx will create inflation. Without any change in policy, the Chinese economy's risk of overheating is continuously increased by the lopsided flow of foreign currency into China. I don't think that this issue is just a problem for Europe. The consenquences of the Chinese economy stalling out would have a worldwide effect. This is not to say that I am a proponent for revaluation as the solution. It didn't work out too well for Japan during its economic boom. Other measures are needed. Sergio