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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (37676)	9/2/2003 1:08:25 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hello tooearly, I returned home today early, at 12:00 noon, because the typhoon signal 3 flag is already up, with signal flag 8 raising expected at 2:00pm, and perhaps a once-in-a-decade signal 10 flag by tonight. At 3, folks living on islands reachable by ferry are supposed to head home. At flag 8, HK shuts down, inclusive of financial (equity/metals) markets. At 8, mud slides and flying flower pots start to do their thing. At 10, which I have experienced only once since 1987, street signs start flying around off their post, and some folks had their heads taken off. <<what will EWJ do if China revalues Yuan?>> My latest figuring on Yuan: (a) There will not be any substantive revaluation of the Yuan vs. USD, because it does nothing for China on the employment/social stability side, and does nothing for the US mortgage borrower aspect; (b) There will most likely be no symbolic revaluation of the Yuan vs. USD because there appears to be a power struggle within the Chinese political sphere that is gaining life of own. No one at this juncture can be seen to set off socio-economic instability. The issue on the surface is nothing more than whether Mao’s picture should come off the Tian An Men (Gate of Heavenly Peace) chinavista.com , to be replaced by picture of Sun Yat-sen sunyatsen.hawaii.org . Below the surface, the issue is status quo vs. more representative rule. The power struggle is between the old guard of the Jiang Ze-ming (ex-communist party chairman, current chairman of Central Military Commission) school and the current front-runner reformers of Hu Jin-tao (current communist party chairman) and Wen Jia-bao (Premier). I do not know what I am talking about when it comes to Chinese ruling politics. I merely listen to others better positioned, and nod my head in feigned understanding. Something I do think I know what I am talking about: should the reformers win, buy PRC stocks with abandon and without fear. Should the struggle drag out or drag into the open, stay away from PRC stocks. (c) When China finally revalues the Yuan: - Japanese companies with Chinese factories will move those factories further inland to capture more competitive labour rates, and their profits may increase or decline; - Japanese machine tool makers will export more to China until they make more machine tools in China or the Chinese companies make better machine tools; - Japanese consumers will pay higher prices for imported Chinese goods; - Japanese companies without Chinese factories and without access to Chinese goods will continue to be less; - Japanese folks will pump more money into China as foreign direct investment; - Japan will continue to lose its tax base; and - EWJ will either go down or up :0) (d) Then Yuan will decline vs. other currencies as China continues printing so as to fluff-up its banking and social security systems. Chugs, Jay