Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (1646)	3/9/2004 10:33:13 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

I agree - at some point we reach the breaking point where he is just PLAIN WRONG. OTOH His analysis of FNM etc is very very good Mish

To: yard_man who wrote (1646)	3/9/2004 10:38:09 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

China the Yuan and the Dollar financialsense.com The headlines that China is looking to let the Yuan appreciate 5% and as much as 10% appeared in one of their local papers. This article went on to state that it is even conceivable that the Chinese might allow the Yuan to float. The officials were fast to come out and state that it was an error. If this was a western country, I might be inclined to possibly believe that an error was committed. However in China where the government enforces their will with Gestapo style techniques and who control the media with an iron arm, I choose to not only disbelieve them when they state this is an error, but actually am even more inclined to take them 10 times more seriously. China is ready to flex their muscles slowly and this is most likely their first test. What do you think will happen when they allow the Yuan to appreciate? The classic easy non-thought invoking answer is, they will suffer because their prices will become non competitive. Oh, if only that answer was even remotely true, I would be pretty happy. No the real answer is that American stores have become little Chinese islands that are loaded to the gills with consumer goods that we no longer can produce. And do not forget the Republic of Wal-Mart. What will actually happen is that the American citizen will suddenly notice the price of consumer goods that have been dropping forever in price start to rise and this will be the first true signs of inflation. So what do the Big boys have to do at home? They have to take a pre-emptive strike and make sure that the dollar appreciates in line with the Yuan to keep this false premise that there is no inflation. And that inflation is actually described as a situation where the price of goods go up and not the printing of more money. And if you have not noticed, like clock-work, the dollar has started to rise. Yes esoteric cycles caught that move, but it is very nice how there might also be another powerful esoteric reason why the dollar must go up, well at least in the short term.