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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Hank Madison who wrote (3382)	11/5/2006 3:30:48 PM
From: Box-By-The-Riviera™	Respond to of 50633

they haven't strengthened their dollar, thus far, except marginally. the prc controls the exchange rate of its currency. it does not free float or trade as freeley as other currencies. hence the big loud noises in congress about putting up tariffs on goods coming into the usa, in order to achieve the same effect. all ridiculous and would backfire on the US economy anyway, but that's another question and answer. the bank move reduces the liquidity, i.e. money available to lend inside the country. but it does not make the money more dear directly, since they did not raise rates. also the rise in the reserve requirement allows for a greater cushion, should the number of defaults in the outstanding loan pool rise. given the red hot lending over the years, such an event is more likely than not. these issues are mostly internal to china and international to the degree that non china money invested there could go up in smoke if chinese internals collapse or correct...that too being more likely than unlikely. as to the dear senators in washingmachineton wanting a stronger chinese currency, they think the trade balance would improve... making our products more in balance (cheaper) for export. others, not considering the trade issue, would say the chinese currency should be worth more given their net reserves i.e. a trillion of foreign currency. i'm not so sure about that. a trillion in reserves they have, probably is more than counter balanced by weak debt within the country (bad investments, bad loans, via graft, and outright criminal activity). its the wild wild west ... but in the east. as to buying our debt... those who do are simply acting the bank to the USA. we borrow, they sell, we pay finance charges. and for what ever the reason may end up being, china, india, japan and the rest, will do this until it no longer serves their interest (or because the finance charges eventually exceed our ability to re finance with new loans), not because someone like george bush tells them to do it. remember also, in china, the machine must keep producing for now. 100's of millions of chinese have not seen any change at all in their lives yet. the people's army is not big enough to thwart them should they become pissed off. The PRC too has a body of voters to satisfy in order to keep power. also, and like some have noticed, the dollar has not weakened in the expected way. quite the contrary. that is no accident in my view. by the same token, our rates are competitive against other currency for return on investment...holding dollars. and, comparatively speaking, the country is for sale on a currency for currency basis. and most certainly, the government has been for sale for quite some time. but let's not talk about that. people might become concerned and shut off their video games. now, i must run and go clean the bathrooms in the house of my mandarin speaking neighbor. boy do they miss, a lot. nasty. hope that helps.

To: Hank Madison who wrote (3382)	11/5/2006 3:48:24 PM
From: c.hinton	Respond to of 50633

a strenthening financial system would in its self make the yuan stonger by reducing risk.......there are also pension funds to be rationalized.....huge,huge pension funds.... and huge amounts of debt to reorganize.imagine the opportunities that there will be for who ever is put in charge . a strong yuan policy would also put china in the drivers seat with regard to the world economy ...in the process delegating the dollar to passenger status.but it will not happen tomorrow ,it will take time.jhmo