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

To: TobagoJack who wrote (38475)	9/20/2003 3:24:20 AM
From: energyplay	Read Replies (2) \| Respond to of 74559

I have been thinking yet again about the US 'push' for the RMB re-valuation. 1) Could it be really to slow the erosion of manufacturing in MEXICO, preserving the social stability and return on investment there ? Also, Mexico buys many things from the US. 2) Or is it to get some deals where China buys more US made captial equipment, airplanes, etc ? It's obvious to everyone that a 30% rise in the RMB would not directly increase even one US manufacturing job.

To: TobagoJack who wrote (38475)	9/20/2003 3:26:43 AM
From: smolejv@gmx.net	Respond to of 74559

Hi Jay, good reading and fun as ever. Re >>The whole world is in competitive money print-a-thon, and China can actually use the liquidity since it has a 300-year pent-up demand for infrastructure<< here's my favourite tune to the subject, rendered by Aretha Franklin You walked in on the sly Scopin' for dough In the crowd, I caught your eye You can't hide your pounds You thought it was a printing match You thought I'd be naive and tame You got your catch I'll beat you up at your own game (chorus) Who's zapping' who, take another look, tell me baby Who's shafting who... oh Who's zappin' who, now that fish jumped on the hook Didn't you baby... Who's shaftin' who (repeat) Guess you believed the world Played by your rules Here stands an experienced pard Nobody's fool... Don't speculate You thought you had me covered, but I've got you by your bait your're bound to be my buyer... oh (chorus) You think you're smooth That you can pick and choose When the time is right... But, just look behind, you'll be surprised to find I'm gonna make you mine tonight... oh (chorus) regZ dj

To: TobagoJack who wrote (38475)	9/20/2003 5:11:25 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

Jay, re: <The guy in Chicago getting paid USD 150,000 for making molds is, in a few words, getting paid too much, and the guy getting costing USD 45,000 for inspecting women’s underwear at airport in Miami is costing too much.> Yes, it's true. But it has been true for decades. For decades I have been in awe of how powerful the resistance of various countries is to financial gravity. Yes, it's a no-brainer to bet that such excessive pay will transfer to umpty million Chinese ready, willing and able to take over manufacturing for derisory pay. It's a bit like the yen carry trade was a no brainer. Except that "no brains" seems a peculiar way to approach such things. Being wary and suspicious and fearful and paranoid, I am not convinced that no-brainer people can outwit Japan's system and Uncle Sam and Uncle Al's financial and geopolitical might. The USA has already fallen from 40c to 59c vs the might $Kiwi. That's quite a move. Nearly 50%. Mqurice

To: TobagoJack who wrote (38475)	9/20/2003 9:28:01 AM
From: Haim R. Branisteanu	Read Replies (4) \| Respond to of 74559

Jay all you write is right but I think you are missing the other side of the equation. Assuming a steep fall in USD will generate inflation in the US as commodity prices will rise as will other imports not originated in SE Asia and China. Direct result will be a deep recession in the US which in turn will also destroy the fragile EZ recovery. Now if this is the outcome of a sharp USD devaluation who will be the swing buyer of China's output ? and what would China achieve by having less export to their captive market ? ..... less jobs exactly the reason that they oppose floating their currency. IMHO the solution would be to enlarge the Yuan trading bands and most important to embark in huge infrastructure projects finance by their trade surplus. This is the only way I see some stabilization coming in the world economies. Removing the huge pile of liquid USD assets by spending it on infrastructure will calm the markets improve standard of living in China and increase domestic spending. China's best solution is to energize even more their domestic economy and some inflationary tendencies in the mainland will not hurt at all as many peasants will feel richer and start also spending. China coastal towns are already in boom times China must trough fiscal stimulus energize the inland region by grants and tax incentives and setting a minimum wage law substantially higher (see Russia) than the present ongoing compensation including in the factories run in the various prisons. IMHO that what China government wants but is fearful to implement. Manipulating FX level will not solve the main problem - China's standard of living of China inland people Similar policies are needed in other populous countries in SE Asia and Indian subcontinent. It is unacceptable that China should exploit their own people misery and underpayment to disc locate people livelihood around the Western world, or force upon the Western World a lower standard of living. If China would not take the appropriate steps to lift the standard of living of their own population on their own expense, I would fully support a forceful action such as a declaration of war to destroy most of China recent achievement. It will cost a lot human sacrifice and human lives ? So be it! Some were politicians must get it or pay the consequence It is a very crude solution which is drastic extreme and simple ....... but wanted to make a point