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

To: benwood who wrote (30792)	4/16/2005 12:37:58 PM
From: RealMuLan	Read Replies (1) \| Respond to of 110194

>>it's likely that the demand to diversify will have ebbed along with the apparent risk.<< The "demand" is diversifying as we speak. China will export more to developing world, and less to the US (all those increasing exports to the US are done by the US companies not Chinese companies). And any trade war bet. the US and China would end up hurting the US companies more than China. >>If you think that the likelihood of a crash would be high if the RMB were floated now, then I'd postulate that there is pent up demand to diversify out of the RMB<< The "pent up demand to diversify out of the RMB" is a nice way to put it. I would call them nothing but the hot money flowing into China specially to bet on RMB appreciation. That is why the CB of China keeps such a big foreign reserve just in case. The reason I think RMB may crash if floating now is because China's banking sector is a mess now, and the corruption is too wide spread. It will take a couple of years to finally clean it up. And then will be the time to talk about floating Yuan.