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

To: TobagoJack who wrote (38851)	9/25/2003 11:43:14 PM
From: BubbaFred	Read Replies (1) \| Respond to of 74559

" Speaking of numbskulls, just how stupid are the Chinese? We are told, by Treasury Secretary Snow as well as by a number of steamy politicians, that the Chinese are shrewdly manipulating their currency (keeping it pegged to the dollar for almost 10 years) in order to undercut U.S. prices and steal American jobs. But what could be dumber? It is like selling good whiskey for half of what it is worth in order to get the business... or allowing a derelict to run up a huge bar tab for fear his will take his custom elsewhere. The U.S. dollar has fallen sharply already. The price of gold has risen. These trends seem unlikely to reverse soon. Yet the Chinese central bank has only 2% of its reserves in gold. Nearly all the rest is in dollars. Holding the yuan down means that they still build up dollars in their vaults, just not as many of them. If the Chinese central bank calls us, we'll tell them it is dumb to hold so many dollars and so little gold. It is dumber to continue accepting dollars, in effect building up a huge credit with a country that can't possibly pay up. And it is dumberer still to take the dollars in at a fixed exchange rate, getting less for your products than they are really worth. Some day, perhaps soon, Secretary Snow may get more than hopes for. The Chinese may wise up." siliconinvestor.com