Debasement war?

Discussion in 'Economy' started by loosecannon, Sep 15, 2010.

  1. loosecannon
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    loosecannon Senior Member

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    We have been in a simmering debasement marathon for decades, in a slowly boiling debasement relay race for a year, and now comes the sprint toward the finish.

    This will make tariffs look like what sissies did to prolong the Great Depression.

    Analysis: Japan yen tactic muddles bid to drive yuan up | Reuters

    Japan yen tactic muddles bid to drive yuan up

    This could be a real shit hits fan event or it could be quickly addressed and resolved.

    I am definitely betting on the former cuz China is not gonna depeg the yuan. And everybody else gets it.
     
  2. uscitizen
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    uscitizen Senior Member

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    There will be no war in debasement of my house.
    Too damn noisy.
     
  3. loosecannon
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    loosecannon Senior Member

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    ok
     
  4. william the wie
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    william the wie Gold Member

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    It will take weeks for this to shake out but debasement war is definitely a possibility.
     
  5. Mr. H.
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    Mr. H. Diamond Member

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    Relax, muthufukkas!

    Obama to the rescue...

    Administration signals tougher approach to China

    WASHINGTON – The Obama administration on Wednesday signaled a new get-tough approach with China, filing two trade cases against the country before the World Trade Organization and also complaining that Beijing is moving too slowly to reform its currency system.

    Treasury Secretary Timothy Geithner, in prepared testimony, said the administration is considering what tools it might use to push China to move more quickly to allow its currency to appreciate in value against the dollar.


    "what tools" being the operative...
     
  6. loosecannon
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    loosecannon Senior Member

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    I sent this to a friend:

     
  7. loosecannon
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    loosecannon Senior Member

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    China Talk Resurfaces In Euro Market

    -Speculation that China may be buying euros to indirectly hold down the yuan is once again circulating around the currency markets as observers struggle to explain a burst higher in the single currency Thursday.

    The euro surged against the dollar mid-way through European trading hours, and most analysts attributed the move to a successful auction of Spanish government debt. A number of pre-existing orders to buy, clustered just above $1.30, also appears to have played a role.

    Some believe that curious forces could be at play, however. In particular, China is seen as a possible source of euro buying as it seeks to hold down the broad value of the yuan, which has recently hit a series of record highs against the dollar.

    "You can never prove it, but maybe this is some Chinese buying," said Lutz Karpowitz, a currencies analyst at Commerzbank.

    The People's Bank of China's news department couldn't be reached for comment Thursday.

    Amid ever-increasing international pressure on China to allow greater and faster strength in the yuan, the PBOC has allowed the yuan to climb unusually quickly against the dollar of late, with its key dollar-fixing rate dropping to a record low of CNY6.7181 Thursday. That marks an appreciation of around 1% in the yuan over the last eight trading days--a small shift for most major currencies, but a significant move for the tightly controlled yuan.

    That kind of currency strength, while modest, poses a risk to China's exports by making the country's products appear more expensive abroad.

    A weaker dollar against other major currencies would be a neat way to counteract that pressure, as it dents the yuan's value on a trade-weighted basis. "It's very convenient for Beijing," said Karpowitz. Another investor, who didn't wish to be named, agreed that this explanation "makes sense."

    Ideas such as these are common features of the rumor-packed currency markets, and China's involvement is all but impossible to prove or disprove.

    Many analysts find this explanation for currency shifts farfetched. Nonetheless, this theory has cropped up a number of times since China dropped its direct dollar peg in June, particularly around intraday currency moves that are tough to explain.

    Thursday's jump in the euro arguably fits that description.


    China Talk Resurfaces In Euro Market - WSJ.com
     
  8. Paulie
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    Paulie Platinum Member

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    Meanwhile, gold continues higher.
     
  9. loosecannon
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    loosecannon Senior Member

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    yeah.

    Geithner signals U.S. impatience on China currency

    Striking his sharpest tone yet in what has long been a flashpoint in U.S.-China relations, Geithner planned to tell a Senate hearing that the yuan was strengthening too slowly and he was looking for ways to get Beijing to move faster.

    Geithner's testimony could be critical to whether lawmakers, who say China hurts U.S. jobs and corporate profits by keeping its currency artificially cheap, decide to push ahead on legislation targeting Beijing's policies before November elections, which are being shaped by voter anguish over the economy.

    "China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to fully reflect market forces," Geithner said in prepared remarks for the first of a pair of Capitol Hill appearances.

    Signaling a reluctance to give in, China's Foreign Ministry said pressure over the yuan exchange rate "not only would fail to solve the problems; on the contrary, it could have the opposite effect."

    It was unclear, however, whether Geithner's get-tough talk would be enough to overcome skepticism in Congress over the administration's approach and head off a bill that would slap punitive duties on Chinese goods.


    Geithner signals U.S. impatience on China currency | Reuters

    Can anybody explain the bolded statement from the Chinese foreign ministry above? Sure, China is leading the global recovery, at the direct expense of the US.
     
  10. Toro
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    Toro Diamond Member

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    Its already happening.
     

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