Author Topic: China Lets Currency Weaken, Risking New Trade Tensions  (Read 1419 times)

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Offline Birdman

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China Lets Currency Weaken, Risking New Trade Tensions
« on: May 31, 2012, 06:42:57 PM »
http://www.nytimes.com/2012/06/01/business/global/china-lets-its-currency-slip-raising-trade-tension.html?ref=business

A weaker Chinese currency will make it more expensive for Chinese to buy coins from the US.  Will this slow the river of coins exiting the US? 

Of course, these currency-war race-to-the-bottom devaluations among nations will make the underlying gold and silver worth keeping in the long run.  Although it seems like an acceleration of the Euro crisis will channel more money into the "safe-haven"?! dollar in the short run, which will further depress the price of precious metals.  It was only recently that I wrapped my mind around this relationship.  A Euro-crisis spike counter-intuitively leads to a DECREASE in the price of gold (at least in US dollars).

A spike in the value of the dollar will be a good opportunity to scoop up some Chinese coins from European countries. 

Offline BChung

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Re: China Lets Currency Weaken, Risking New Trade Tensions
« Reply #1 on: May 31, 2012, 10:43:07 PM »
Actually I think its time people to realize that the Yuan is not undervalued AT ALL. Well maybe that is also why I don't hear the BS from Washington and Europeans b***ching day and night about a undervalue yuan stealing that and that to cover their incompetence.

With the Chinese economy slowing, which IMO is a VERY good thing for the country and its people. As a matter of fact there was no growth of the Chinese economy for the past 3 years and inflation figures were in double digits instead of the BS low figure from the government. Xinhua has wrote an article saying that Beijing is against stimulating the economy again like the 1 trillion yuan stimulus in 08/09. As a result money is moving out of the RMB even in Hong Kong the RMB deposit is reaching a 11 month low. IMO its not because of the Peoples Bank that is weakening the Yuan intentionally, the Yuan is simply not undervalued anymore.