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| Chinese Devaluing Their Currency? |
| 2008-12-05 |
| The current rumor is that the Chinese are so furious about US banks selling them bad securities while watching the US government bail themout, they will be devaluing their currency by the end of the year. Right now all this means is that the Federal Reserve's plan to reflate the economy just took a coupla torpedoes amidships Now for TFA: SHANGHAI (AFP) — A sudden drop in the value of the Chinese currency may signal a policy shift to prop up exports during the financial crisis, experts said Tuesday. The yuan fell by its maximum daily trading limit for a second consecutive day Tuesday. The fall in its value comes just before the United States and China hold high level economic talks in Beijing at the end of the week. The yuan's value has been a sensitive issue in the past between China and the United States, which has accused Beijing of deliberately keeping its currency low to protect the competitiveness of Chinese export prices. "It is the best timing for the yuan to start depreciating," Lu Zhengwei, a Shanghai-based economist with Industrial Bank, told AFP. "The slowdown in China's economy is clearly intensifying, the export sector is suffering the coldest winter in the past five years." |
| Posted by:Ebbineger Ebbolusing8960 |
| #5 It's a mad race to the bottom. Wonder who will lose first, thus win.... |
| Posted by: Alaska Paul 2008-12-05 23:53 |
| #4 HOld on a sec, I thought they were supposed to be angry at us if we didn't do the bailout? Now they're angry at us that we did? I think Hu Jintao is worried about keeping his position at the top of the greasy pole. And the guys around him are eyeing his perks and prestige hungrily, while casting worried glances at the Chinese populace, which may (or may not) become less worshipful of the Communist Party if unemployment skyrockets, and the standard of living drops. |
| Posted by: Zhang Fei 2008-12-05 22:30 |
| #3 HOld on a sec, I thought they were supposed to be angry at us if we didn't do the bailout? Now they're angry at us that we did? |
| Posted by: Thing From Snowy Mountain 2008-12-05 22:10 |
| #2 This is a tyoical emerging market tactic: protect exports through currency manipulation. They pursue it in good times and bad. The good news is that to make their policy effective the Chinese cannot sell dollars, which means they are stuck with their current paper and need to keep buying more with their export earnings. |
| Posted by: DoDo 2008-12-05 22:10 |
| #1 The current rumor is that the Chinese are so furious about US banks selling them bad securities while watching the US government bail themout, they will be devaluing their currency by the end of the year. I think it's worry about the state of the Chinese economy more than fury at the US. They're in deep doo-doo and sinking. |
| Posted by: Zhang Fei 2008-12-05 22:01 |