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To: Mohan Marette who wrote (95503)	2/6/1999 11:21:00 AM
From: OLDTRADER	Read Replies (1) \| Respond to of 176387

Thanks so much -really cogent inormation (quality stuff) is rare anywhere-let alone on threads.

To: Mohan Marette who wrote (95503)	2/6/1999 12:59:00 PM
From: JRI	Respond to of 176387

Mohan.... An excellent article about "Chinese devaluation".. Really, if I recall, we are on same side of the fence here...Where we differed some (was really more than anything) a question of semantics... The article considers export tax rebates, deflation (factors) in China, and Japan raising its rates as a "devaluation" (passive)...so did you I believe.... When I use the word devaluation...I am using it is the (active) sense...when a country's government or "Federal reserve" in a short-period of time (even..from one minute to the next) changes the currency rules... Devaluation in China (in the passive sense) and may not even lead to some (or even any) of their Asian export "competitors" to take subsequent measures..... The effects are minimal and measured. With (active) devaluation....THERE IS a big danger...that being the (almost reflex, panic-induced) reactions that occur (in financial markets around the world, but also in the home country)... the home currency gets an extra hit....becomes "in play" ... speculators pounding the currency over short-periods of time....with the rapid outflow of investment capital in a short-period...this can throw a country into economic chaos and quickly...and it takes longer for this productive capital to return (and be put to use) then when it leaves... Of course, we know, it is difficult for speculators to attack the Chinese currency..but they can (effectively) do it thru the HK dollar... The word "devaluation" nowadays, I believe, is more often used in this (active) sense, although one could still use it is the (passive) sense... In the passive sense, in free or semi-free floating currencies, there are always some currencies devaluing against others somewhere in world (on a daily basis)...this, I don't see, as a major problem...even moderate changes... It is the shock of a sudden devaluation that throws the world for a loop...and I think we both agree...this will not happen in China... Don't worry, be happy!