<<Sociopathic behavior and a leaning toward political and economic self-destruction is amusing??>>
... yes, especially since nothing much can be done, and so might as well enjoy it
<<what do you think about the premise, contained in the following article, that suggests that the Yuan was undervalued by 33%>>
... why not 50%, 70%, 0%, or RMB is actually over-valued against the dollar? Based on what?
Gold on the streets of Beijing cost 20% more at current exchange rate to the dollar (cost USD spot price plus 20%), and so one might reason that RMB is over-valued against the USD in a rather objective way.
Besides, RMB at 50% revaluation against the USD will not make any difference to China export to USA, but make some difference to China butying of USA if USA was actually for sale (oil companies, etc), which is apparently forbidden.
Since the F22 is also not for sale, no trade re-balancing will happen to make any difference. The RMB would buy more T-bills, which is perhaps not what Schumer & co has in mind.
China is not export savings via goods. China is accumulating savings via export of goods; how else can one explain a trillion reserve?
<<Should there be a major economic collapse of China's speculative bubble ...>>
... China is undergoing once in a 800 years reform, is satisfying a 600 year pent-up demand for roads, airport, dams, etc, and so there is a construction frenzy, but hardly a speculation bubble. All the real estate space is and will be taken up, as it has for the last quarter century.
China can be compared to USA 1905/1920, and when doing so, all becomes much easier to comprehend.
<<Guess I should keep my eye on WMT as a potential short after the 2008 Olympics (because Bejing will continue to prop up their economy and permit the madness to continue at least until then)>>
... WMT may be a good short, though I doubt it. I think the high ends are good shorts, and the low end will become more and more essential for living in the USA.
As to China slowdown in 2008, I think the opposite, in that once the constrait of putting a good show on is done, the nation can get back to building things other than sports stadiums and apartments in the several key cities.
I note that now even the little inland smaller cities are getting private enterprising, and the effects is behginning to show. Further, the critical mass of per capita income by 2008 in certain cities (Shanghai, Guanzhou, Xiamen, etc) will allow for 'next leg up' infrastructure construction that has an environmentally friendly bent.
It is difficult to satisfy a 600 years pentup demand within 2 years, or 20, or 200.
j
p.s. the amount of capital waiting to enter china, piling up at the border, especially here in hk, is mind bending. but the officialdom policy of discouraging such money will keep events calm for a bit longer. The piled up funds, along with prospecting investors, will eventually find a way or be allowed in. Such money can hardly said to be 'hot money' since China has a closed capital account, and any money getting in cannot easily get out.
You must start from a new premise, that the growth story is (i) genuine, (ii) once in every 800 years, (iii) awesome, (iv) transformational, and (v) not a 'bubble'; else your analysis will continue to be faulty, and your expectations never be met.
Think about it, (i) how many societies would have survived a TianAnMen Incident year with 5% GDP growth, and (ii) how many nations can come to a SARS full-stop for 6 months and not have riots?
Not New Orleans. |
