(Snow) US Treasury chief urged faster yuan move-official - moves to devalu

[UpInArms]

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6382816

WASHINGTON, Sept 30 (Reuters) - U.S. Treasury Secretary John Snow laid out a case for a faster move toward yuan currency flexibility at a meeting on Thursday with Chinese officials, a Chinese official who was at the meeting said.

"We introduced what we did to prepare the system, the macro base for a more flexible currency policy," the official, who was part of a Chinese-U.S. meeting ahead of the Group of Seven finance ministers gathering on Friday, told Reuters.

...more...

[sweetheart]

1. dumping the deficit

Europe has taken the brunt of the dollar's weakening with the
appreciation of the euro whilst the cowardly japanese and chinese
central banks just bought more dollars.... and finally there is
some pressure to share the load.

Bottom line, the deficit is only a few trillion, but when you
count in the retirement timebomb its close to 70 trillion in 10 years
time. Don't expect a strong dollar in your lifetime. This is the
highest it will ever be.

[w4rma]

2. I'm more worried about more and more of those dollars being controlled

by fewer and fewer folks. That, imho, is the greatest cause of inflation of all. When a few hundred folks have half the money supply in their collective banks inflation WILL happen.

You tax those ultra-wealthy folks for those retirement dollars and then retirement isn't even an issure with inflation.

[sweetheart]

3. Somebody's got to pay the credit card

Trillions in debt... it don't matter how many people are
responsible for the bill... its destabilizing because of the size
of the deficit and the fiscal irresponsibility.

Wealth concentration is not really the issue in this regard.

That is not to say that it is not an issue, but not in a forex thread.

[Art_from_Ark]

4. "Cowardly" Japanese central bank?

Are you not aware of the severe gyrations in the dollar-yen exchange rate that were regular occurrences during most of the '80s and '90s? More than any other industrialized currency, Japan's yen was bobbing up and down like a yo-yo, merely because currency traders could make tons of money manipulating the exchange rate. And since everything was valued in dollars, this created much havoc for Japan's economic planners and companies that were dependent on foreign markets, because they couldn't predict what the all-important dollar-yen exchange rate would be a week later, much less a year later. So finally the Japanese government said, Enough is enough! They threatened to use up to $1 trillion to beat the currency traders at their own game if some sort of stability wasn't restored to the exchange rate. And Japan was probably the only country in the world to have the resources to back up that threat! So the currency traders finally had to give in. And in the process, Japan got lots of interest-bearing Treasury bonds.

There was nothing cowardly about that-- it was, in fact, a brilliant gambit.

[54anickel]

5. Asian Doubts Regarding the Dollar (related article)

I had posted the original article related to in this one earlier this week in the SMW thread.

http://www.lewrockwell.com/north/north308.html

snip>

CHINA HOLDS THE CARDS

Dr. Jiang then gets around to China. He writes:


In China's case, its rapidly increasing foreign exchange reserve will incur substantial losses if the US dollar continues to weaken.
At the end of 2000, China's foreign exchange reserve was US$165.6 billion. By the end of 2002, it rocketed to US$286.4 billion before it soared to US$403.3 billion by the end of 2003. By the end of June this year, the reserve was registered at a staggering US$470.6 billion.

About two thirds of the reserve is dominated by the US dollar. As the dollar goes down, China will suffer great financial losses.

Experts estimate that the recent US dollar devaluation has caused more than US$10 billion to be wiped from the foreign exchange reserve.

If the so-called US dollar crisis happens, China will suffer further loss.

EDITED BY ADMIN: COPYRIGHT

more...

Hmmmm, and what Canadian purchase and lease did China just announce? Oil and gold.

http://www.abc.net.au/asiapacific/news/GoAsiaPacificBNA_1209339.htm

[Moderator]

6. 54anickel

Per DU copyright rules
please post only four
paragraphs from the
copyrighted news source.


Thank you.



DU Moderator

[fedsron2us]

7. China's trade volume figures are very interesting

I did not realise that China did more trade with Europe than the USA.

It would be interesting to break these figures down further. China obviously runs a trade surplus with the USA. Does anyone know what the balance of trade is between China and Europe ?

[Art_from_Ark]

8. Interresting data on EU, US, Japan and China trade

According to Tables 8 and 9, China apparently has a slight trade surplus with the EU, at least as of 2003

http://www.europarl.eu.int/facts/6_2_1_en.htm

It's interesting to note that the EU's trade imbalance with China appears to be shrinking, while the US, which used to have a trade surplus with EU in 1990 and was at parity in 1995, now runs a deficit with the EU.