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Prude

As The Yuan Floats (step By Step Or Otherwise) ..

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Following the trade US/China trade talks the BBC report stated;

"There were no breakthroughs at talks in Washington, though President Hu Jintao said China would "continue to take steps" to revalue China's currency."

In its analysis (What is America's China problem?) it states;

"The US has pushed for restrictions on Chinese textile exports, which were imposed last year, and now many US manufacturers insist that China has undervalued its currency to keep its manufactured exports cheap.

They argue that China should increase the value of its currency, the yuan, by up to 40% to restore the competitiveness of US goods."

My economics is limited but as this process takes place (the speed is yet to be determined) wont the effect be massive inflation as we (UK) for instance don't have the manufacturing capacity any longer to choose not to import newly inflated Chinese goods?

Do the Americans know what they are asking for?

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My economics is limited but as this process takes place (the speed is yet to be determined) wont the effect be massive inflation as we (UK) for instance don't have the manufacturing capacity any longer to choose not to import newly inflated Chinese goods?

Yes.

Do the Americans know what they are asking for?

No.

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No prob, I think if anyone has a large STR fund they would be wise to hold ~+10% in Yen or the Nikkei.

It just makes good sense right now. Japan is the creditor behind all this.

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No prob, I think if anyone has a large STR fund they would be wise to hold ~+10% in Yen or the Nikkei.

Interesting, could someone explain for a layman why is buying Yen a good idea at the moment though, since at the moment you don't get Interest on such a bank account. Thanks.

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Interesting, could someone explain for a layman why is buying Yen a good idea at the moment though, since at the moment you don't get Interest on such a bank account. Thanks.

Like a BTL, you do it for the capital appreciation only!

frugalista

To clarify, no you won't get any interest. But the argument is that the Yen/£ rate will move in your favour, and increase the value of your money. The reason for this being that pounds are being printed at a far greater rate than yen, and this money supply difference will find its way into the price of things, and thereby the exchange rates.

frugalista

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To clarify, no you won't get any interest. But the argument is that the Yen/£ rate will move in your favour, and increase the value of your money.

I see - so the gamble is that the Yen will become stronger over time (with their higher IRs) and therefore buy more £ back. Think I've got it now.

Also what funds to buy for the layman which are Nikkei-linked ? Perhaps I should be in the investment forum so sorry if I'm veering off-topic.

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Just how devasting would a 40% increase in the value of the Juan be? And how quickly will this be done?

Wasn't there just a 2% appreciation last year?

However the US want this to happen a lot quicker. Wouldn't this cause huge US inflation too as I don't think that their internal industry would pick up the sweat shop slack. They must be seeing it some other way.

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  • 332 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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