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

To: TobagoJack who wrote (56502)	11/26/2004 3:49:24 AM
From: Taikun	Read Replies (1) \| Respond to of 74559

Jay, <FYI, this is why I think that should the RMB actually float, as opposed to artificially re-pegged, RMB may fall 20% against the USD, as opposed to rise 20% (although the initial reaction might be a rally due to foolish overseas money looking for a joy ride)> Leads to: -raw materials, energy more expensive for China -acts as tightening effect on economy, CB may have to lower rates to stem rises -China may be able to pass on higher input costs when sales prices drop due to lower RMB -chance of trade war escalates -if this occurs after other Asian nations have revalued up (Asian nations revaluing now, possible in advance of China's move), result could be huge disconnect between Asian economies, where China is much cheaper. -Singapore may benefit because overall trade should remain strong even if lopsided towards China -Japan will benefit from exports to China but maybe lose in world marketplace This makes me all the more worried about placing too many bets on Asian currencies, although I was planning on increasing Yen bet. There may be attractive prices on Chinese equities coming up. If Japan's economy balanced capital and current account surplus (as US is being forced to do), Yen will have to appreciate greatly. EW's Prechter says maybe 90 maybe 50. Japan will be in for interesting times at 50!! D