The Yuan rose about 5.5% over the last 12 months..
Posted on 09/10/2007 11:29:30 PM PDT by bruinbirdman
...and nothing about the yuan. That’s interesting.
Thanks for posting this.. it adds further evidence to my thinking that inflation isn’t under control globally. And this is a global economy.. rising prices in China will get here eventually. The Chinese government will looks like have to keep raising interest rates, and hopefully continue raising the reserve requirement, as imo is a good idea.
Its interesting to note that they include food in their calculation while we do not. The Chinese will likely also try mechanisms to lower the price of food, to buffer the affects on their poor masses. And so there isn’t so much pressure to raise.
I think folks here in North America and also in Europe are too optimistic that we are going to see lots of rate cuts going forward.
Are the ChiComs printing too many yawns or renminbis?
Do Red Chinese in rural areas buy rice with yawns or renminbis? One greenback buys about 7.54 yawns. How many renminbis in a yawn?
yitbos
The Yuan rose about 5.5% over the last 12 months..
The Yuan probably figures in the Hsu DNC Hillary Clinton $850,000.00 story. They’re not talking about Yuan that much there either though. Heh heh heh...
The chart appears to show the yawn floating, down. Yet it is pegged to the buck. If the greenback falls, how can the yawn rise?
yitbos
As I understand it, the renminbi is the Chinese yuan as discerned from the new Taiwan dollar.
I don’t know whether making too many of them would keep the currency down on the world market. But my uneducated guess is that if Chinese workers have to pay more for their products, so will American importers, eventually. It appears that the dollar must fall.
And as more workers become active in new production in China and other countries, more of them will be commuting. It doesn’t look like oil will go down in the long term.
Yours,
familyop, AKA Captain Obvious, the uneducated macro-macro-macro economist (’cause it’s so easy. ...too bad that it doesn’t pay)
Thank you.
1.00 CNY (China yuan renminbi) = 0.13295 USD
at ~ 3:29 AM ET (Reuters)
http://today.reuters.com/Investing/Currencies.aspx
In 2005 the Chinese broke the absolute peg with the dollar which was at 8.28 yuan per dollar. But they made it so the Yuan could only move .1% up or down each trading day. Then later they made it so the Yuan could move .3% up or down each day. And they may have made an additional loosening of controls since then.
I like how China gradually makes changes, ending at the eventual goal.. without one chaotic leap with disastrous impact.
“I like how China gradually makes changes, ending at the eventual goal.. without one chaotic leap with disastrous impact.”
A freedom of movement much easier when your every fiscal move doesn’t prompt harmful-to-you hysteria.
But I did say "about".
yitbos
LOL! We rural macro-macro-macro economists only reckon in the master-of-the-universe way. [IOW, all those digits made my Dukes-of-Hazard head hurt.]
Mao's Cultural Revolution showed them that big changes, even popular ones that sound good, can be traumatic if the occur too quickly. That's how the CCP can get away with promising slow advances for social freedoms... and even then, only after the economic freedoms have been "sufficiently advanced". In reality, this means the obvious: that the CCP will allow those freeedoms only when the population screams for them and the CCP is actually threatened... and while everyone is either enjoying the new wealth or trying to get in on the action, they aren't likely to complain too much about free speech (etc) that they've never known anyway.
Exactly. I can see the higher prices right now (I'm in Shanghai at the moment), and inflation is higher than in the US. However, their economy is growing even faster.
A GDP growth of 3% with a 2% inflation rate is much worse than a GDP growth of 10% with a 5% inflation rate.
China's economy is nearly as free-market as the US at this point, and you see a lot of pressures to open up the other aspects of life. China's opened Pandora's box of capitalism, and right now I get the feeling the leaders here aren't so much fighting the loss of a communist society as trying to manage the change to a socialist (think Germany or France style) government with the least harm to the country.
The Chinese, for anything else, are highly pragmatic people. The writing's on the wall that a free market and open society are the only ways they will grow in terms of international power and position, and so the problem is how to transition there with the least disruption to the day-to-day realities.
TIC - This Is China.
We will wake up one morning to discover that the US govt has drastically devalued the dollar overnight. That is how it usually happens to a banana republic.
BUMP
In China right now, it’s the bottom of the income scale that’s heavily gaining in income. Minimum wage requirements in Guangdong province (where 20% of China’s exports are made) are up - again. Up 20% over the last year. That’s one of the reasons a small shortage in pork creates such a spike now, unlike 6-8 years ago; so many of the working class can now afford pork on a daily basis that demand has greatly grown.
And these labor laws are strictly enforced; one factory I work with over here was audited, forced to pay back wages, and fined double the total of back wages. It’s not the US or the EU, but it’s a lot better than it was 10 years ago, and better than Mexico, India, South America (save for Chile), and other places with heavy exports.
The richest in China are doing fabulously, and you can still live like a king of $3000/month. But the lower rungs are quickly climbing, evidenced by sudden jumps in food prices and housing costs, because they can afford these items. In fact, labor costs have increased so much that some companies are pulling out and moving operations to Vietnam and Cambodia, with even lower labor costs.
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