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

To: mishedlo who wrote (17074)	11/29/2004 2:00:42 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 116555

mish, Andy Xie talks about how making the dollar cheaper would hurt imports, but then we don't have any factories to make anything, anyway. That's true. But another factor is that the dollar (and the US worker) would have to take a huge beating to make us competitive in world markets. I don't think any politician can stand 10% interest rates or major league underemployment in this country. If any could, it would be Dubya, who would smirk and say we're making progress while the retardos losing their jobs would say "we wuv Dumbya for his moral values." <G>

To: mishedlo who wrote (17074)	11/29/2004 2:58:15 PM
From: RealMuLan	Respond to of 116555

Thanks for the article, Mish. Andy Xie had some good suggestion. China has already tried to dilute RMB by printing more. And they will have to keep plenty of dollars in the money market account once they start to mark the market using US$. Although I do not expect to see Japan can confront the US any time soon or ever<g> Japan has a tradition to look down upon other Asian nations. The latest example is the consumer market potential in China. 5-10 years back, China invited Japan to set up auto factories as well as other factories in China but Japan was arrogantly ignored. As a result, they completely missed the auto market boom in China. The market share of Japanese cars in China is <10%. They are now trying to do some damage control and accelerating the outsourcing to China. Noticeably, this time Japan keeps their silence on Yuan revalue. There are already plenty of claims on China side that the US is trying to make China victim of their own irresponsible fiscal policy, so the Chinese gov. stand on the matter is domestically very popular. And I think it is quite popular as well with other Asian nations, ex. Japan.

To: mishedlo who wrote (17074)	11/29/2004 3:06:24 PM
From: RealMuLan	Respond to of 116555

[Mish, here is an article to explain it better]--Report: China Banks to Get Dollar Dealings 11.29.2004, 12:11 AM Regulators may let China's four biggest state banks become market makers in U.S. dollar trading, paving the way for less currency intervention by the central bank, a state-run newspaper reported Monday. A market maker agrees to act as either a buyer or seller in a financial transaction when no other party can be found. The People's Bank of China, the central bank, is now China's key market maker in U.S. dollar trading due to tight restrictions on foreign exchange dealings. Draft measures for expanding the number of market makers for U.S. dollar trading have been completed, and the State Administration of Foreign Exchange - China's top foreign exchange regulator - will decide when to announce them, the China Business Post reported. China's four biggest banks - Industrial & Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of China - would be the first market makers to be approved, the report said, citing unnamed sources. The report gave no time frame for the proposal's implementation. China tightly controls trading in its currency, the yuan, and sets its value within a narrow band at about 8.28 yuan per U.S. dollar. The reported plan to allow more market makers would not directly affect the yuan's value. But it is part of a broader series of reforms aimed at eventually loosening restrictions on currency trading. By expanding the number of financial institutions authorized to handle U.S. dollar trading, regulators hope to slow the surge in China's foreign exchange reserves, which are held by the central bank. That move would be "very welcome," said Xia Bin, an official in a research department under the State Council, China's Cabinet. The plunge in the U.S. dollar's value against many key currencies has obliged China's central bank to boost dollar buying to keep the value of the yuan steady. That, coupled with strong foreign direct investment and exports, had by late September boosted foreign exchange reserves to almost US$515 billion (euro396 billion). The dollar's fall has prompted mounting speculation that China might adjust the yuan's value against the dollar soon. Central bank officials have responded by saying they have no timetable for foreign exchange reform. The yuan will "continue to remain stable at a basically reasonable and balanced level," the China Securities Journal cited Li Ruogu, deputy governor of the People's Bank of China, as saying at a meeting Sunday of the Asia Pacific Economic Cooperation countries. "It's impossible for us to completely stop speculative forces or behavior, but we don't want to see domestic or overseas individuals or institutions speculate on the yuan," the report, published Sunday, quoted Li as saying. forbes.com