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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (30773)4/15/2005 11:21:35 PM
From: Taikun  Respond to of 110194
 
Mish,

Jay Chen explained to me about the pent-up demand in China by people who want to diversify out of RMB. Imagine their luck when the RMB immediately spikes up after depegging. All those funds rushing offshore could then send the RMB down. There have been currency controls, controls on purchasing gold at market prices for quite awhile.

Markets are like a casino. The question is what is the probability the RMB falls, and work the odds. Personally I'd bet on 40%. There has to be someone on the other side of these trades.

D



To: mishedlo who wrote (30773)4/16/2005 1:18:31 AM
From: RealMuLan  Read Replies (1) | Respond to of 110194
 
If RMB floats now, which is out of the question, then it might go up and then crash. But if RMB floats 3-5 years from now, it might go up or stable, the possibility of crash for RMB 3-5 years from now is very small.

As for Chinese want to diversify away from RMB, it is a myth. The truth is few people in China now want any US$. And if they want, they can get US$ very easily.

BTW, a lot of trade around Chinese boaders now uses RMB to mark the market.


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