Posted on 09/07/2015 6:19:50 AM PDT by blam
Ben Moshinsky
September 7,2025
China is spending billions propping up its struggling currency and as a result its foreign currency reserves fell by a record amount last month.
China spent $93.9 billion in August, reducing its cash pile to $3.56 trillion. This is almost double the drop in July, when $50 billion was spent.
The People's Bank of China is spending all this cash on propping up its currency, the yuan, which has been suffering since China devalued it against the dollar.
China's central bank is selling the dollars it holds and buying yuan in a bid to boost the price by juicing the supply and demand ratios.
But the problem for China is that as it burns through its reserves at a faster pace, it signals to the market that the currency has further to fall — the currency needs propping up, meaning the demand is artificial.
That's speeding up a capital flight from the country. A falling currency makes it more expensive for people to shift their assets overseas and if it looks like the yuan is going to keep falling, people make a run for the exits.
And as money flees the country, China is forced to spend more to prop up the currency, which causes more angst for investors — it's a vicious circle.
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(Excerpt) Read more at businessinsider.com ...
Actually it is quite recently, in just the last two years, it still isn’t fully implemented and they didn’t remove it universally. They still have 40years of imbalance in male/female babies to make up for as well. The problem with these demographics is going to take a long time to unwind.
I never said it would be easy, just less intractable than China’s problems.
You’re right, but they are useful arsenal and bargaining chips in negotiations in opening other country’s market. Ultimately the best case is no tariffs, but you cannot start the negotiation by disavowing them any more than you can start a peace negotiation by first disavowing the use of force. Once you do that the other side has to reason to come to terms.
Pretty soon they’ll have to resort to “printing” their own money. /s
And, millions more on the way and most of them don't like you.
Right, it was free trade that did us in, not government spending, regulation, taxation and debt including pensions.
That’s something a communist would know, no?
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