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 : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Paul Berliner who wrote (5461)	8/12/1998 2:17:00 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 9980

Taiwan to devalue? Maybe so, but it would make little economic sense. The 4 reasons you give for devaluation are mostly political and maybe they will win the argument. The one economic reason you give, that it would increase exports, depends on the reactions of their trading partners. It is beginning to remind me of the description of Lake Woebegone, where all the children were above average. Since all countries cannot have lower currencies at the same time it becomes like the dog chasing its' tail. I think I am correct in stating that most politicians are beginning to see devaluation as a recipe for disaster and will only do so as a last resort. Does Taiwan NEED to devalue its' currency? I think the answer is clearly no. Taiwan has run a trade surplus for each of the last 10 years and has reserves amounting to almost $85 billion. Its' trade balance is only slightly negative and the economy is still growing. ml.com Since Taiwan imports many raw materials whose cost is dollar denominated it would not be the plus that you mention to their overall trade picture. Will Taiwan devalue? I can't say. Should they devalue? Absolutely not. -Robert

To: Paul Berliner who wrote (5461)	8/12/1998 2:18:00 PM
From: Bosco	Respond to of 9980

G'day all - dear Paul, regarding your Taiwan theory, it sounds interesting. However, I am not sure how to make of it. 1st, while minor, your statement "Taiwan wants independence from China" can be quite problematic, especially if you juxaposit the historical circumstance with the present balance of powers. Semantic aside, while I ve no great admiration for the 1st generation of KMT, I will give more credit to the current crop of Taiwanese leaders to be smarter than a pack of petty officials hell bent on avenging a shot from "an empty canon" and sacrificing their positions amongst the locals. Also, to be explicit, if memory serves, Taiwan has already de-pegged the USD. So, what is to devalue? Finally, Taiwan recent [last several years] buildup of technology infrastructure/capacities in effect will impact the US more than China. Incidentally, while S Korea and Taiwan both try to be technology titans, the latter seems to be able to manage its economies better with less discontent from the locals [thanks in part to [some sort of an implicit] resolution to the native taiwanese issue.] Of course, this is just my not-so-brite 2c <G>. If you think your premises are valid - and thus the conclusion - then by all means short the bloody merciless of the Taiwanese $ <G> best, Bosco