Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (7718)	3/21/2007 9:11:56 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

The Chinese Central Bank has been telegraphing their intention to lower USD Reserves bflchinafund.com RNB -- YUAN Tuesday 03-13-07 John J Pitera -- john@bflassociates.com We anticipate that the Chinese will promulgate a timetable in the next few weeks which will outline the time horizon in which the Central Bank will reduce U S Dollar reserves from 1.07 Trillion dollars Reserves downward to more like 650 Billion US. This shift in The Central Bank's Asset allocation structure will result in downward pressure on the U S Dollar. And remember that since China has been increasing it's U S Dollar currency reserves each month, this means that they will have to be active in the foreign exchange Market selling each months trade surplus of U S Dollars in additional to about 34% of the stockpile that the Bank 0f China has accumulated. The Central Bank and I M F have suggested that total currency reserves for China should be about 650 million dollars. Thus the Central Bank will shift assets into different asset classes over a period of time. This is going to be a very dynamic and exciting theme from a market analyst/trader/ Macro Asset Allocation management perspective. Near record surplus, plans for flexible RMB China announced a near-record US$23.8 billion trade surplus in February, hours after the central bank promised to make the renminbi more flexible, AFP reported. Authorities said the surplus was almost 10 times the figure a year earlier and nearly matched the record of $23.8 billion set in October, which is certain to spark more protests that China keeps the renminbi deliberately undervalued to gain an export advantage. February exports totaled US$82.1 billion, up 51.7% year-on-year. In response to the surplus, some US senators have suggested levying a 27.5% tariff on Chinese goods and even called for a cancellation of China's most-favored nation status, which gives it preferential policies as a developing country. Chinese officials firmly opposed the idea, suggesting it violated the rules of the World Trade Organization.