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.

Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (22616)	3/12/2005 5:06:52 PM
From: The Vet	Read Replies (1) \| Respond to of 81177

Maybe I didn't word that very well when I said "> The truth is that virtually all fiat currencies (with the possible exception of the Rand) have devalued together following the USD down. " Your reply " Now we have to agree to differ. I'd say all the principal currencies (including the rand) have all appreciated against the USD -- and these are the charts to prove it: " is correct if we are using the USD as the reference, but that's just like measuring distance with an elastic band. Compared to the CRB or gold most of the currencies are flat or have devalued slightly over the past 3 years. On your comment "I would say yes, but providing there is still demand for the goods manufactured from that "stuff". You are right, but the kind of manufactured goods that China is selling tend to have high labour content and low raw material content. Just how much raw material value is there in a CD player or small kitchen appliance? Changes in the CRB and all the materials that go into it won't affect China's export goods price by very much at all, and a higher currency value will actually lower the costs of their much vaunted internal expansion of infrastructure. However the competition the Chinese could create for raw materials and the resultant pressure on prices in the US could bring a world wide recession, and that would eventually cut the demand for Chinese exports. The interesting thing to ponder is what would be the effect if the renminbi not only gets revalued upwards but gains some status as a trading currency enabling many countries to bypass using the USD entirely for the bulk of their trade. This is not all that unlikely IMO.