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Us Demands China Revalue It's Currency !

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EDIT - REVALUE

This all seems a bit mental to me. Plan to introduce trade sanctions if the Chinese do not do it ? ohmy.gif

US Demands

Isn't this the sort of talk that could quickly escalate into something rather more serious and more explosive - shall we say..are they going to come after us next - ours has been devalued about 30% in the last 18 months..ph34r.gif

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This all seems a bit mental to me. Plan to introduce trade sanctions if the Chinese do not do it ? ohmy.gif

US Demands China Currency devalued

Isn't this the sort of talk that could quickly escalate into something rather more serious and more explosive - shall we say..are they going to come after us next - ours has been devalued about 30% in the last 18 months..ph34r.gif

Linky no worky.... :)

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Isn't this the sort of talk that could quickly escalate into something rather more serious and more explosive - shall we say..are they going to come after us next - ours has been devalued about 30% in the last 18 months..ph34r.gif

I think you mean revalue?

If yes, there is nothing mental about it, China is destroying the US economy (and the UK's, European, Brazilian, Indian, etc.) in its quest to bring all jobs to China. With Europe saying 'no more deficits, austerity here we come' and Japan saying 'oh but we are deflating we can't do a thing', the US is forced into the position of consumer of last resort yet again. And it can't assume that role anymore because it's consumers are bust. Something's got to give.

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correction:

revalue its currency

Aye - mistake #2. But you get the point !!

Why would China do this and damage it's own trade just because the US said so ? I suppose the threat of sanctions could be one reason - but still it sounds like a bit of an extreme and unfair demand from one Sovereign Nation to another.

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I think you mean revalue?

If yes, there is nothing mental about it, China is destroying the US economy (and the UK's, European, Brazilian, Indian, etc.) in its quest to bring all jobs to China. With Europe saying 'no more deficits, austerity here we come' and Japan saying 'oh but we are deflating we can't do a thing', the US is forced into the position of consumer of last resort yet again. And it can't assume that role anymore because it's consumers are bust. Something's got to give.

But demanding it and threatening sanctions ? To a country that has a massive military capability and is slowly taking up the mantle of World Superpower ?

I think that is a little mental. Talking about it with them fair enough. Actually demanding it is risky IMO.

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I think you mean revalue?

If yes, there is nothing mental about it, China is destroying the US economy (and the UK's, European, Brazilian, Indian, etc.) in its quest to bring all jobs to China. With Europe saying 'no more deficits, austerity here we come' and Japan saying 'oh but we are deflating we can't do a thing', the US is forced into the position of consumer of last resort yet again. And it can't assume that role anymore because it's consumers are bust. Something's got to give.

If i were China id be piling in to North Korea right now.

Think of all those north Koreans who need new socks and microwaves etc....

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I think you mean revalue?

If yes, there is nothing mental about it, China is destroying the US economy (and the UK's, European, Brazilian, Indian, etc.) in its quest to bring all jobs to China. With Europe saying 'no more deficits, austerity here we come' and Japan saying 'oh but we are deflating we can't do a thing', the US is forced into the position of consumer of last resort yet again. And it can't assume that role anymore because it's consumers are bust. Something's got to give.

Yes! All that happens is that Chinese goods are kept artificially cheap and we then have to borrow the money from the chinese by way of GILTs or Treasury sales to keep abreast of our trade deficit! We should all find a way to stop buying so much from China. Try india? At least they have their own Rupee.

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This all seems a bit mental to me. Plan to introduce trade sanctions if the Chinese do not do it ? ohmy.gif

US Demands

Isn't this the sort of talk that could quickly escalate into something rather more serious and more explosive - shall we say..are they going to come after us next - ours has been devalued about 30% in the last 18 months..ph34r.gif

"The issue here is not US protectionism but China's flouting of the rules of free trade,"

What, you mean like the Fed does? :rolleyes:

TBH, I can understand the USA's annoyance, but isn't the strength of the Chinese currency a matter for the Chinese people (and their government) as well as the markets? If the Chinese people are happy to do back breaking work for a pittance, isn't that their problem and their responsibility to demand more value for their money?

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But demanding it and threatening sanctions ? To a country that has a massive military capability and is slowly taking up the mantle of World Superpower ?

I think that is a little mental. Talking about it with them fair enough. Actually demanding it is risky IMO.

When do you react though? Do you wait until you are so impoverished and lost so many jobs that your GDP per capita is that of an average African country? What happens to your military capability when you are poor?

The US have waited a _very_ long time for this and I think it has reached the stage where they are beginning to realise how much damage China is doing them.

We are close to the end on this one. The SHTF moment is close.

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Yes! All that happens is that Chinese goods are kept artificially cheap and we then have to borrow the money from the chinese by way of GILTs or Treasury sales to keep abreast of our trade deficit! We should all find a way to stop buying so much from China. Try india? At least they have their own Rupee.

There is an easy solution to that problem - we should stop borrowing so much!

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"The issue here is not US protectionism but China's flouting of the rules of free trade,"

What, you mean like the Fed does? rolleyes.gif

TBH, I can understand the USA's annoyance, but isn't the strength of the Chinese currency a matter for the Chinese people (and their government) as well as the markets? If the Chinese people are happy to do back breaking work for a pittance, isn't that their problem and their responsibility to demand more value for their money?

Yep thats what I would think. Whether you like it or not - they can do what they want. And clearly they are going to take their own self interests as paramount. I think the US are gradually understanding that they can't have it all their own way anymore. Could be worrying times. I don't think the US will go that easily. ph34r.gif

It's a trade war.

Indeed. Declining trade and they all want a piece of what is left.

What was that thread on here a while back ? The different stages of this whole thing and how it would end in protectionism and then war ? Looking a little more likely with chat like this.

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The US is in no position to demand anything.

The US buys almost as much tat from China as the EZ. If Chinese exports collapse the peasants will turn nasty and when a billion peasants get rowdy the Mandate of Heaven kicks in and there is a violent regime change. The Chinese are a highly dependent lot.

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When do you react though? Do you wait until you are so impoverished and lost so many jobs that your GDP per capita is that of an average African country? What happens to your military capability when you are poor?

The US have waited a _very_ long time for this and I think it has reached the stage where they are beginning to realise how much damage China is doing them.

We are close to the end on this one. The SHTF moment is close.

Yep. Protectionism and then war. I used to think that was purely TFH thinking. Not so sure anymore.

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Why doesn't the US just peg its currency to the Yuan at a different rate instead :)

haha! That's go me thinking, though. Surely the US has the power to put pressure on the peg through the markets instead of politics. The Fed's been printing dollars - could they can use those dollars to purchse Chinese financial assets denominated in Yuan and break the mechanism that China uses to hold the peg, namely purchasing dollar denominated assets? Or does China have capital controls in place that would stop that from being possible?

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TBH, I can understand the USA's annoyance, but isn't the strength of the Chinese currency a matter for the Chinese people (and their government) as well as the markets?

It's a matter for _both_ countries if rates are managed or a matter for the markets.

A the moment the rate is determined by the Chinese Politburo only.

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But demanding it and threatening sanctions ? To a country that has a massive military capability and is slowly taking up the mantle of World Superpower ?

I think that is a little mental. Talking about it with them fair enough. Actually demanding it is risky IMO.

Should have been done a long time ago. Initially, the US established an easy-terms trading relationship with China to try and split them away from the USSR; and more recently there has been lobbying from the likes of Wal-mart to maintain this.

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Or does China have capital controls in place that would stop that from being possible?

It does.

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It's a matter for _both_ countries if rates are managed or a matter for the markets.

A the moment the rate is determined by the Chinese Politburo only.

If they trade in fiat currencies, which can be pegged, printed etc and they can damage your economy, maybe they need to look at this arrangement again? If the system only works if everyone plays by some fictional rules, then it's not a very good system. IMO, this is just another example of how our financial system is struggling to work in a global environment.

Presumably the market can also dictate whether goods are bought from one place or another too. In addition, the Chinese people are part of the market too and could strike/lobby for more value from their currency etc.

It is all a bit daft, TBH. China has kindly stepped forward to do back breaking work for peanuts and then we moan that it is harming our industry. Should we not be grateful that we get stuff much more cheaply than if we had made it ourselves? While the Chinese are embroiled in sweat and toil, we get to do cushy non-jobs, while buying their cheap tat. Who has the better side of the deal here?

Also, nobody forces the developed world to borrow from the developing world. It was short term thinking all right, but it was our collective choices. We asked to dig a hole for ourselves and they just handed us a spade. They are probably laughing at us behind our backs! <_< The smile may be wiped off their faces, should a few defaults starts to effect them though... :unsure:

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It is all a bit daft, TBH. China has kindly stepped forward to do back breaking work for peanuts and then we moan that it is harming our industry. Should we not be grateful that we get stuff much more cheaply than if we had made it ourselves? While the Chinese are embroiled in sweat and toil, we get to do cushy non-jobs, while buying their cheap tat. Who has the better side of the deal here?

Them. When you have no production capacity left, no jobs and a stock of debts you are struggling to repay who do you think will be better off then?

Also, nobody forces the developed world to borrow from the developing world. It was short term thinking all right, but it was our collective choices. We asked to dig a hole for ourselves and they just handed us a spade. They are probably laughing at us behind our backs! <_< The smile may be wiped off their faces, should a few defaults starts to effect them though... :unsure:

I would recommend you read the following to put things in perspective:

http://mpettis.com/2010/04/the-rmb-and-the-magic-of-accounting-identities/

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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