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To: russwinter who wrote (4126)	12/29/2003 7:44:28 PM
From: TobagoJack	Read Replies (1) \| Respond to of 110194

<<China may reconsider yuan peg, analysts say>> ... It would be ironic if China re-pegs against a basket of currencies (Euro, Yen, USD) and during a correction (or break up) of Euro and a drubbing of Yen, depreciates against the USD :0) Chugs, Jay

To: russwinter who wrote (4126)	12/29/2003 9:25:06 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

I'm surprised no one here has jumped all over the ramifications of the Chinese yuan revaluation discussed here. Message 19636601 This will be big, and I think it happens in stages soon. Consider the immediate impact (inflation) on imported goods to the US. Consider the immediate increase in wealth of the average Chinese, and overnight reduction for them in the cost of energy and other commodities. Would the Japanese continue to aggressively peg the yen by subsidizing US rates after a yuan revaluation? I don't think so, as the main goal is to stay competitive with China, not the US. I think the Japanese will just let the yen trade higher. That's the quid pro quo with the Chinese to get the deal done. Probable impacts on the US: higher import prices=inflation, higher interest rates as Asians back away from dollar recycling. Could the US benefit in the short run from a stronger yen, and yuan versus the USD? Not enough? The Euro might weaken some, as it would no longer be the only free trading major currency in the world, and because of the backup in US rates.