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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: William Shen who wrote (1635)	5/19/1998 8:33:00 AM
From: MikeM54321	Respond to of 2951

William writes: >>So as you can see, both the underlying political as well as economic drivers are clearly favoring a stable currency, I simply can't see how the RMB will devaluate in the near term. It is only the wishful thinking of those hedge managers. Would love to hear any feedback from you.<< William, I really don't have an opinion on what you think may happen concerning if a currency devaluation happens OR what will result if it does happen. As a matter of fact, I'm not even trying to have my own personal opinion. It's not easy. From most of what I read, a devaluation by China will lead to increased export because China is at a disadvantage right now. They are the only ones holding onto the Asian fort, so to speak. Of course, I then read a lot about how it will be a disaster for most everyone if they do. My only commentary may be this. China's Premier Zhu boxed himself into a corner by making such strong statements about not ever letting the currency peg fall. For a currency trader, it's almost like placing a chip on his shoulder and daring someone to knock it off. I believe it would have been best if he just supported the peg without making any statements about it. By making those statements, he zeroes in the world's press on what, I'm asumming, must be a battle to hold it. I think (?) I recall some statements from George Soros about how one thing that clues him that a devaluation may happen, is for exactly what China is doing. George Soros said that when a government steps in to fight a currency devaluation, it usually fails. He said free market forces are just much stronger. I just don't know what is going to happen. But I have to say, from my general reading and understanding, there doesn't seem to be to many that believe China will hang on and hold the pegs in Hong Kong and China. Maybe that is only because a story about "holding the peg" doesn't attract as much attention as "devaluing" does? I really appreciate everyone's opinion on this board. It doesn't always agree with the main stream press and that makes it a lot more interesting. Thanks, MikeM(From Florida)