loosecannon
Senior Member
- May 7, 2007
- 4,888
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He might not but I would. If Chinese investors cannot buy US securities and real estate at something close to purchasing price parity China will in all probability explode soon. The Chinese real estate bubble or the Chinese state will end soon.Meh
I wouldn't put much stock in it.
There is a theory floating around out there that this is a precursor to the Chinese revaluing the yuan. The Chinese cannot revalue as long as Americans are lecturing the Chinese to do so. However, if they can argue to their people that a bond rating agency is saying that investors should be worried about their investment in US bonds, then they can revalue the yuan, since the loosening the peg will mean buying less US bonds.
I bet that you would not wager on that theory being true tho.
OK, but they still are not about to drop the peg and usher in 40% inflation asap.