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

To: RealMuLan who wrote (56857)	9/22/2006 10:21:45 AM
From: Arran Yuan	Read Replies (1) \| Respond to of 116555

People tend to forget one thing when they look at huge foreign reserve of China, that is although China's foreign reserve is huge, but China also has plenty of foreign debt. After discounting those foreign debt, China's reserve is not big at all. Mulan, That is exactly why I am not a fan of converting into RMB Yuan because PBoC has the last resort of injecting liquidity into the economy that is way over real GDP growth to fight against speculative capitals betting on Yuan's appreciation in FOREX value. In fact, Yuan's appreciation against FRN$ could be of benefit to China as China has spent much of its FRN$ reserve all over the world. RMB yuan is only better at present in that it has more room to be inflated for further devaluation. So I do not like to hold my cash in it. Cheers Arran