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So it will make it harder for China to defend the Yuan? Kind of like what happened in Russia. Is the Yuan losing value a real concern?
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Apr 20, 2015 13:11
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Ardennes posted:The US can hold a large amount of debt, by virtue of the US dollar being so wildly used andit won't devalue unless the Fed wants it to. Japan and European countries that didn't kneecap themselves with the Euro can also print money freely without repercussion. Whatever the criteria are, being a reserve currency is not a necessary one.
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Apr 20, 2015 13:31
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Peel posted:Japan and European countries that didn't kneecap themselves with the Euro can also print money freely without repercussion. Whatever the criteria are, being a reserve currency is not a necessary one. Actually I would disagree with you there, they can't without devaluation. Ukraine is an example of this at the moment. Greece could print but it would suffer devaluation. The question is if an austerity based depression is better is an whole other matter. Jumpingmanjim posted:So it will make it harder for China to defend the Yuan? Kind of like what happened in Russia. At some point in the future maybe, but right now China has over 3.6 trillion in reserves. That is still a lot of money, and while it is down from 4 trillion, it will take years for it to reach levels that are really a problem. Russia, while it has to spend a consider amount of its reserves to defend the Ruble, didn't run out of them either but obviously they are far thinner than China. Russia greatest decline was from oil fears and speculative bets against it (which to be fair were good bets to make in December/January).
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Apr 20, 2015 13:40
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Ardennes posted:Greece could print but it would suffer devaluation. Greece can't print euros. (In the figurative sense of expanding the money supply, not in the sense of actually producing the bills; they do the latter.)
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Apr 20, 2015 14:23
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tagesschau posted:Greece can't print euros. (In the figurative sense of expanding the money supply, not in the sense of actually producing the bills; they do the latter.) I am talking about a situation where the New Drachma came back, Greece couldn't print New Drachma without consequence.
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Apr 20, 2015 14:48
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Countries often want to devalue their currencies Ardennes. There's no magic line where you cross 5% inflation and you're suddenly WEIMAR GERMANY MONEY SUPPLY NEVER FORGET!!1 I think you are confusing sovereign debt crisis (which can be triggered by sudden currency devaluation among other things) with currency devaluation generally.
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Apr 20, 2015 15:38
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Arglebargle III posted:Countries often want to devalue their currencies Ardennes. There's no magic line where you cross 5% inflation and you're suddenly WEIMAR GERMANY MONEY SUPPLY NEVER FORGET!!1 You are assuming I am saying it is going to be a Weimar situation in the first place, devaluation can happen and still be quite moderate and sustainable. A sovereign debt crisis can be part of it but it doesn't necessarily have to be the case. That said, if a country has no way to defend a currency, it is going to weaken and if it gets into a cycle where it is borrowing to support a currency it can eventually lead to a crisis. Yes, and sometimes countries do want to devalue, you just don't want to be in a situation where you have to.
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Apr 20, 2015 16:17
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Ardennes posted:Anyway, someone mentioned that there is no way to reach "higher than middle income status" without liberalization, but that isn't really true. Look at the gulf states as an example to the contrary, they are very wealthy and very unliberal. Admittedly they got this way because of commodities, but commodity exports are what many if not most middle income countries going be relying on in the first place. Exporting natural resources such as petroleum is not the same as exporting manufactured goods, particularly when you also account for the fact that the population of these petrostates are sufficiently low that the immense poverty of the working class is balanced by the insane wealth of the oil barons, and considering them "high income economies" as a consequence is misleading. I didn't say that there is no way to reach high income status without liberalization, I said it was without precedent. You can theoretically sit down and etch out a scenario on paper of an authoritarian high income economy but usually such scenarios are contingent on assuming that the authoritarian regime not only has access to a stupidly high amount of accurate economic data on a day to day basis (or is a petrostate/tax haven) but also that the authoritarian regime is benevolent and selfless and will remain so forever. Both of these are fantasies, particularly the latter.
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Apr 20, 2015 16:23
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Fojar38 posted:Exporting natural resources such as petroleum is not the same as exporting manufactured goods, particularly when you also account for the fact that the population of these petrostates are sufficiently low that the immense poverty of the working class is balanced by the insane wealth of the oil barons, and considering them "high income economies" as a consequence is misleading. There are only a handful of countries (mostly in Asia) moved from developing countries to developed countries, historically. Saying "no precedent" doesn't mean anything. Are you not counting Singapore as a developed country? It look pretty developed to me.
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Apr 20, 2015 16:34
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Why would Greece or China want to defend their currency though? Maybe I'm wrong about what you're thinking about but I don't understand your point. Why would Greece want to endure possibly decades of nominal wage deflation when it could magic real wage deflation into existence in months by printing currency? Why would China want to hurt its enormous export sector by buying Yuan? I don't understand what you're trying to say.Jumpingmanjim posted:
The source of China's war chest is unimportant to the story. What it's doing is recapitalizing banks with government money (where that money comes from is immaterial since these are domestic debts, ignore the canard about Central Asia) because it's worried about banks being undercapitalized. That's it. The government is worried about state banks being undercapitalized and exposed to more risk than they could cover in the short term, so it's shifting some money to them with some lame half-excuse. Jumpingmanjim posted:So it will make it harder for China to defend the Yuan? Kind of like what happened in Russia. China is not Russia, again. Russia exports natural resources and imports a ton of finished goods from Europe including food. The ruble falling wouldn't be nearly as big a deal if Russia didn't rely so heavily on imports. China exports finished goods and imports mainly luxuries and hi-tech stuff and oil. A falling yuan is good for the export industry as it makes Chinese goods cheaper for foreign buyers, and not nearly as bad for the average person who doesn't rely on imports for food and finished goods like a Russian. The yuan losing value is not a big concern for China and many industries would see it as a big positive with little or no downside. Arglebargle III fucked around with this message at 16:40 on Apr 20, 2015 |
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Apr 20, 2015 16:35
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whatever7 posted:There are only a handful of countries (mostly in Asia) moved from developing countries to developed countries, historically. Saying "no precedent" doesn't mean anything. Singapore had liberal reforms, just not in the realm of civil rights. And saying that there's no precedent is meaningful because I don't see China as being particularly exceptional with regards to authoritarian countries, as much as they like to trumpet "with Chinese characteristics." I think that most of its success has been due to its massive population rather than anything particular about their political economy.
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Apr 20, 2015 16:41
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Fojar38 posted:Singapore had liberal reforms, just not in the realm of civil rights. quote:And saying that there's no precedent is meaningful because I don't see China as being particularly exceptional with regards to authoritarian countries, as much as they like to trumpet "with Chinese characteristics." I think that most of its success has been due to its massive population rather than anything particular about their political economy. I don't think it matter that much in this century. If China one day surpass US's GDP in a few decades down the road (big if), China is still a developing country based on per capita number. The whole concept of "developed country" and "developing country" will be thrown out. The narrative will change to "East vs West" to more accurately describe China's global influence. Or, if the climate change gets really bad in the next few decades, the narrative will change to "global north" vs "global south" to describe the countries that can or can not adjust the climate change disasters.
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Apr 20, 2015 16:51
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Arglebargle III posted:Why would Greece or China want to defend their currency though? Maybe I'm wrong about what you're thinking about but I don't understand your point. Why would Greece want to endure possibly decades of nominal wage deflation when it could magic real wage deflation into existence in months by printing currency? Why would China want to hurt its enormous export sector by buying Yuan? I don't understand what you're trying to say Ultimately your arguments are not really tracking what I am saying. Countries want to keep their currencies stable for a reason, and there is a big difference between quantitative easing and losing the ability to support a currency. China wants the Yuan relatively cheap, that is fine and it has the ability to fine-tune the Yuan fairly well. However, as I said though, that confidence ultimately comes from their reserves and they wouldn't be in the same position without them. Greece isn't in that position, even if it had its own currency, its reserves are relatively strapped and a New Drachma would fall like a rock if they didn't get support from the EU for it. This is the sword that the EU is holding over their heads, because only the EU or the IMF is going to lend to Greece. Greece almost certainly would in fact be in very bad shape if they left the Eurozone without support, and it may very would face very high inflation and devaluation along with likely continued unemployment. quote:China is not Russia, again. Russia exports natural resources and imports a ton of finished goods from Europe including food. The ruble falling wouldn't be nearly as big a deal if Russia didn't rely so heavily on imports. China exports finished goods and imports mainly luxuries and hi-tech stuff and oil. A falling yuan is good for the export industry as it makes Chinese goods cheaper for foreign buyers, and not nearly as bad for the average person who doesn't rely on imports for food and finished goods like a Russian. Eh, China imports actually quite a bit from the outside world, including much of its energy and raw resources. Maybe it wouldn't in as bad a situation as Russia but it wouldn't necessarily be pretty especially since the gap between imports and exports has greatly tightened. A failing Yuan to a point is a good thing, but they don't want to lose a grip on the Yuan entirely and they don't have the same safety-net the US does. Basically, you are conflating purposeful adjustment of currency with uncontrolled devaluation, and that is a mistake. I don't think even in the mid-term China has to worry about it, but it is something that needs to be outlined. Fojar38 posted:Exporting natural resources such as petroleum is not the same as exporting manufactured goods, particularly when you also account for the fact that the population of these petrostates are sufficiently low that the immense poverty of the working class is balanced by the insane wealth of the oil barons, and considering them "high income economies" as a consequence is misleading. They aren't model economies by any means, but I wouldn't call them undeveloped even if development through the use and abuse of migrant labor. We don't really need to sketch one out because they already exist, and waving away the authoritarian nature of Singapore isn't exactly helping the issue. Also you seem to be trying to connect authoritarian states and a command economy, which is a very tired Cold War argument. As in the case of liberalization in Eastern Europe has certainly been a mixed bag, and while the EU states have mostly liberalized, it is becoming more apparent than it was likely do to a large part in being in a customs union with other high income countries. In addition, you formerly liberal states like Hungary if anything becoming increasingly more authoritarian. To be clear what we are talking about as far as modern-day liberal economics is: deregulation, privatization, high tax burden on working/low income population and the eradication of a social safety net. Ardennes fucked around with this message at 17:26 on Apr 20, 2015 |
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Apr 20, 2015 17:18
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whatever7 posted:I don't think it matter that much in this century. If China one day surpass US's GDP in a few decades down the road (big if), China is still a developing country based on per capita number. The whole concept of "developed country" and "developing country" will be thrown out. The narrative will change to "East vs West" to more accurately describe China's global influence. China won't surpass the US in GDP, but even if it did it still wouldn't become "East vs West." China is surrounded by powerful neighbours in a way that America and Europe aren't.
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Apr 20, 2015 17:26
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Fojar38 posted:China won't surpass the US in GDP, but even if it did it still wouldn't become "East vs West." China is surrounded by powerful neighbours in a way that America and Europe aren't. In that scenario the Russkies have to count as "Team East". I don't know, maybe call it "Team Authoritarians" vs "Free Market Fundamentalists" 
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Apr 20, 2015 18:09
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whatever7 posted:In that scenario the Russkies have to count as "Team East". I don't know, maybe call it "Team Authoritarians" vs "Free Market Fundamentalists" Eh, in that case I think China would be pretty outnumbered considering Russia wouldn't stick its neck out for them and vice-versa.
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Apr 20, 2015 18:16
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An authoritarian command economy and its allies take on the US and the other liberal capitalist states on the geopolitical stage, in a sort of 'cold' war - a thing that has never happened before and definitely didn't end in the complete victory of liberalism. Like I honestly don't understand how or why anyone would take the USSR in the Cold War as a good geopolitical model, considering how badly they got beaten. The only explanation is that people think China is simply special and superior and not bound by earthly realities The predictions about the US stagnating are sort of like Trotsky predicting in the early 40s that the postwar US would be plagued with permanant recession icantfindaname fucked around with this message at 18:29 on Apr 20, 2015 |
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Apr 20, 2015 18:24
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icantfindaname posted:An authoritarian command economy and its allies take on the US and the other liberal capitalist states on the geopolitical stage, in a sort of 'cold' war - a thing that has never happened before and definitely didn't end in the complete victory of liberalism. Like I honestly don't understand how or why anyone would take the USSR in the Cold War as a good geopolitical model, considering how badly they got beaten. The only explanation is that people think China is simply special and superior and not bound by earthly realities China isn't an command economy and doesn't offer much of an alternative geopolitical model if that helps. Also, I don't think they are especially that interested in a new Cold War even if so many Americans seem to desperately want one again. That said, if anything it is more likely that Japan and the EU are going to stagnant though. Oh yeah and Trotsky got knocked off in 1940, so it wasn't the worst prediction considering the US was still doing pretty lovely under the late 1930s after a second inflicted double-dip recession. Ardennes fucked around with this message at 18:56 on Apr 20, 2015 |
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Apr 20, 2015 18:50
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icantfindaname posted:An authoritarian command economy and its allies take on the US and the other liberal capitalist states on the geopolitical stage, in a sort of 'cold' war - a thing that has never happened before and definitely didn't end in the complete victory of liberalism. Like I honestly don't understand how or why anyone would take the USSR in the Cold War as a good geopolitical model, considering how badly they got beaten. The only explanation is that people think China is simply special and superior and not bound by earthly realities It's Orientalism. There are a poo poo-zillion articles and opinion pieces floating around the internet about how China is special because it had the largest economy in the middle ages and that its geopolitical pre-eminence is certain because of that, and that it also won't have to liberalize because Asians have been conditioned for centuries to obey the emperor. An article that is constantly referring to the PRC by "The Middle Kingdom" is a pretty big red flag in this regard. quote:China isn't an command economy and doesn't offer much of an alternative geopolitical model if that helps. Also, I don't think they are especially that interested in a new Cold War even if so many Americans seem to desperately want one again. They aren't interested in a Cold War because they'd get creamed and the Chinese political establishment is aware of that.
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Apr 20, 2015 18:50
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There won't be a new cold war because primary conflict of 21 century is oriented from Middle East. The conflict between China and the US will always be 2nd tier, or 3rd tier conflict if Putin wants to take the spotlight of secondary conflict. China pretty much have a free hand to build man made islands in South China Sea, at least for now.
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Apr 20, 2015 19:02
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Ardennes posted:Also, I don't think they are especially that interested in a new Cold War even if so many Americans seem to desperately want one again. China's PR campaign about America's decline and its rounding up of the world's failed states as allies says otherwise I think. They probably don't want to actually have to fight a cold war, but they definitely seem to want the image of being a cold war grade rival of the United States. I don't see why the US should tolerate it, especially if China continues with its policy of annexing other countries' territory at will icantfindaname fucked around with this message at 19:15 on Apr 20, 2015 |
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Apr 20, 2015 19:07
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icantfindaname posted:China's PR campaign about America's decline and its rounding up of the world's failed states as allies says otherwise I think. They probably don't want to actually have to fight a cold war, but they definitely seem to want the image of being a cold war grade rival of the United States. I don't see why the US should tolerate it, especially if China continues with its policy of annexing other countries' territory at will Ultimately, no one wants to really disturb the rather significant economic and trade connections between China and the West (especially the US) at this point. They can give loans to Venezuela but Venezuela is simply small fries compared to the economic weight China has. If anything if the USSR and the US had a productive trade relationship in 1945, the Cold War wouldn't have happened. We are going to appease them to a point as long as it doesn't involve them actively trying to gobble entire countries. That said, the Chinese are going to test the limits of this, and will almost certainly look to maximize their influence where they can find it and with the world as it is, there will be openings.
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Apr 20, 2015 20:31
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whatever7 posted:I would count Singapore and SK as developed countries. Probably not Taiwan since it's not been doing well in the last few years. By that metric A whole lot of Europe isn't developed. Japan too.
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Apr 20, 2015 23:19
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GoutPatrol posted:By that metric A whole lot of Europe isn't developed. Japan too. Why? Japnese make less than Taiwanese? *Those* european countries you are thinking of are playing in the AAA league of developed countries. I also made a point in the same post the "developed" and "developing" labels are not very useful. whatever7 fucked around with this message at 23:37 on Apr 20, 2015 |
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Apr 20, 2015 23:27
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Ardennes posted:Ultimately your arguments are not really tracking what I am saying. Countries want to keep their currencies stable for a reason, and there is a big difference between quantitative easing and losing the ability to support a currency. China wants the Yuan relatively cheap, that is fine and it has the ability to fine-tune the Yuan fairly well. However, as I said though, that confidence ultimately comes from their reserves and they wouldn't be in the same position without them. Greece isn't in that position, even if it had its own currency, its reserves are relatively strapped and a New Drachma would fall like a rock if they didn't get support from the EU for it. This is the sword that the EU is holding over their heads, because only the EU or the IMF is going to lend to Greece. Greece almost certainly would in fact be in very bad shape if they left the Eurozone without support, and it may very would face very high inflation and devaluation along with likely continued unemployment. No it doesn't. You're being ridiculous. Why are you talking about Greece and China in the same sentence? The guy asked "could China have trouble defending their currency?" and the answer is "no, and it's not likely to be a problem in the first place" but you said all of this. What situation could even see a falling yuan anyway? The ruble fell because people stopped buying Russian exports all of a sudden. When is China likely to head into trade deficit? You brought the conversation in this direction talking about foreign exchange as if it mattered in this Chinese banking story, and you're just grasping to make yourself look like you said something relevant. "lose a grip on the Yuan entirely" seriously? Oh my god this page.
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Apr 21, 2015 02:50
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http://www.afr.com/news/world/kaisa-default-adds-to-china-property-fears-20150421-1mpgh2quote:
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Apr 21, 2015 03:55
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Is there any recommended current material on China's rare earths industry? I remember people babbling on years ago about how they were stockpiling this and that and were going to dominate the world, I just rolled my eyes and moved on. As far as I know the reality is China is the number one producer and exporter of rare earths which is a fairly volatile market as precious metals tend to be and has a nice bonus of being environmentally disastrous.
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Apr 21, 2015 04:24
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I don't have any sources on hand, but from what I recall the rare earths debate really isn't a debate at all. China is the only current major exporter of them because they have been able to do it far cheaper than in the West, mostly by ignoring environmental degradation and giving low wages. If China ever refused to sell rare earths, for whatever reason, the United States and Australia would be able to begin mine their huge stockpiles again within just a few months. The sites were shut down only because they were unprofitable compared to unethical Chinese mines.
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Apr 21, 2015 07:05
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whatever7 posted:Why? Japnese make less than Taiwanese? By "not doing well." It ain't all growth there.
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Apr 21, 2015 07:52
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Arglebargle III posted:No it doesn't. You're being ridiculous. Why are you talking about Greece and China in the same sentence? The guy asked "could China have trouble defending their currency?" and the answer is "no, and it's not likely to be a problem in the first place" but you said all of this. What situation could even see a falling yuan anyway? The ruble fell because people stopped buying Russian exports all of a sudden. When is China likely to head into trade deficit? You brought the conversation in this direction talking about foreign exchange as if it mattered in this Chinese banking story, and you're just grasping to make yourself look like you said something relevant. "lose a grip on the Yuan entirely" seriously? They are in the same sentence only because I am contrasting the significant differences between them. In particular, I needed an example of what happens to a country that can't control their currency. Either way, you are still wrong, it isn't inconceivable China could run a trade deficit at this point, their current account surplus has dwindled considerably and now is around where it was in 2002-2003. In addition, China has taken the biggest hit to their currency reserves in recent history. It isn't nearly as big as the hit Russia took, but at the same time we don't really know how bad the banking system actually is in China and how far they are going to have go to fix it. Ultimately, China's economy and its financial system is far from invulnerable. Even then I don't see China or the Yuan being in an emergency in the medium term but it seems you want to shut-down any conversation of any long-term consequences. This is a very familiar tactic. I wish you wouldn't fly off the handle and instead actually read what I wrote. Declines in their currency reserves are something that should be mentioned because down the line they could be an arbitrating factor. China taking from their reserves to inject more liquidity into banking is something that probably needs to be mentioned as an issue, even if its consequences may be 10 years away.
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Apr 21, 2015 09:18
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Biggest hit to their currency reserves* in recent history. *currently at $3.5 trillion  You only want to talk about the long term because your answer was irrelevant to the question and you want to pretend the conversation was about something different. You are actively making the world dumber to save face. Arglebargle III fucked around with this message at 10:47 on Apr 21, 2015 |
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Apr 21, 2015 10:44
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Ardennes posted:They are in the same sentence only because I am contrasting the significant differences between them. In particular, I needed an example of what happens to a country that can't control their currency. Either way, you are still wrong, it isn't inconceivable China could run a trade deficit at this point, their current account surplus has dwindled considerably and now is around where it was in 2002-2003. In addition, China has taken the biggest hit to their currency reserves in recent history. It isn't nearly as big as the hit Russia took, but at the same time we don't really know how bad the banking system actually is in China and how far they are going to have go to fix it. Ultimately, China's economy and its financial system is far from invulnerable. Even then I don't see China or the Yuan being in an emergency in the medium term but it seems you want to shut-down any conversation of any long-term consequences. This is a very familiar tactic. I wish you wouldn't fly off the handle and instead actually read what I wrote. You're trying to argue that China is in a precarious situation with its foreign reserves because it needs to maintain and defend the RMB's exchange rate with these reserves. China does not have this problem right now nor has it faced such a problem in the past 20 years. You only need to use the foreign reserves to defend an overvalued pegged or semi-pegged currency, which is the opposite situation with the RMB. Instead, there is pressure on the RMB to appreciate, or in other words it is generally seen that the RMB is undervalued. To defend this kind of exchange rate situation, the PBoC can just print RMB* and use it to buy foreign currencies on the foreign exchange. By defending the RMB exchange rate, the PBoC does not drain its foreign reserves but in fact increases it. In fact, this is one of the primary ways in which China amassed its foreign reserves over the years. The decline is the foreign reserve is also not very important because their foreign reserves are still insanely massive. It went from $4 trillion to $3.5 trillion these past 6 months, but that's still nearly triple of the foreign reserves of Japan (which are the 2nd largest in the world.) and triple what China had in 2008. And again, why would they need that much foreign reserves if they don't have to defend their currency with it? Make no mistake, I am no cheerleader for the Chinese economy. It's got a stupendously horrifying bad debt crisis on its hands and no good options. On top of that, its political system is crisis-prone due to its need for consensus building amongst self-interested and corrupt political factions. But what you have here is an incorrect assessment of the RMB exchange-rate situation. Also, I need to repeat this again: using foreign reserves to intervene in the domestic economy is meaningless. It all comes back to the central bank to be exchanged back into the domestic currency. This negates the supposed benefit of using these "hard" foreign currencies. *for those who are curious, technically the PBoC "sterilizes" these printed RMB in order to prevent inflation within China. It's debatable if it works anymore these days.
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Apr 21, 2015 11:20
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Arglebargle III posted:You are actively making the world dumber to save face. Chinese Role Play?
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Apr 21, 2015 12:09
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So much trading the stock machine computer broke:quote:
http://in.reuters.com/article/2015/04/20/china-exchange-software-idINL4N0XH3AJ20150420
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Apr 21, 2015 12:40
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Arglebargle III posted:Biggest hit to their currency reserves* in recent history. The fact their reserves are declining is something should be pointed out considering to this point they were rapidly climbing. If this is indeed a turning point, and it trends over the long-term, then yes it is a problem. That I said multiple times it isn't a near-term issue. I actually don't know what you think this conversation is about. You seem to be arguing only against yourself, and insulting people you obviously can't or won't honestly engage with as a back up option. quote:You are actively making the world dumber to save face. You need to work on your emotional maturity. CIGNX posted:You're trying to argue that China is in a precarious situation with its foreign reserves because it needs to maintain and defend the RMB's exchange rate with these reserves. China does not have this problem right now nor has it faced such a problem in the past 20 years. This is false, it is an argument I clearly said I wasn't making. You can do better than this. quote:You only need to use the foreign reserves to defend an overvalued pegged or semi-pegged currency, which is the opposite situation with the RMB. Instead, there is pressure on the RMB to appreciate, or in other words it is generally seen that the RMB is undervalued. To defend this kind of exchange rate situation, the PBoC can just print RMB* and use it to buy foreign currencies on the foreign exchange. By defending the RMB exchange rate, the PBoC does not drain its foreign reserves but in fact increases it. In fact, this is one of the primary ways in which China amassed its foreign reserves over the years. The decline is the foreign reserve is also not very important because their foreign reserves are still insanely massive. It went from $4 trillion to $3.5 trillion these past 6 months, but that's still nearly triple of the foreign reserves of Japan (which are the 2nd largest in the world.) and triple what China had in 2008. And again, why would they need that much foreign reserves if they don't have to defend their currency with it? Actually the RMB started to mildly devalue since 2014, we can postulate why this is so but it is actually rather doubtful it is undervalued at the moment. Ultimately, if the Renminbi has already reached an equilibrium point, it completely throws off your entire argument. Their reserves are obviously massive, but ultimately the issue is still the rate of the decline over the long term and hidden dangers we know exist in the Chinese financial sector. They obviously could go on for years with that sort of decline, but I disagree completely they wouldn't have to defend their currency at some point if that happened. Even if you want to pretend I am arguing it is a short-term danger (something I literally said it wasn't), the Chinese Yuan isn't invulnerable. To be clear here both you and Arglebargle are making the argument that it is essential is invulnerable over the long-term, and have been using obsolete data to do it. quote:Also, I need to repeat this again: using foreign reserves to intervene in the domestic economy is meaningless. It all comes back to the central bank to be exchanged back into the domestic currency. This negates the supposed benefit of using these "hard" foreign currencies. Speaking in generalities: ask Ukraine how meaningless it is at this point. computer parts posted:Chinese Role Play? Don't do that. Edit: And oh yeah this was my response if there was a danger to the Yuan: quote:At some point in the future maybe, but right now China has over 3.6 trillion in reserves. That is still a lot of money, and while it is down from 4 trillion, it will take years for it to reach levels that are really a problem. Ardennes fucked around with this message at 13:25 on Apr 21, 2015 |
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Apr 21, 2015 13:02
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Ardennes posted:I actually don't know what you think this conversation is about. You would save yourself some time and effort if you figured this out before posting responses. 
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Apr 21, 2015 13:26
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Arglebargle III posted:You would save yourself some time and effort if you figured this out before posting responses. Unfortunately I can't read minds, even if I did, it probably wouldn't help this particular conservation very much.
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Apr 21, 2015 13:36
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Arglebargle III posted:No it doesn't. You're being ridiculous. Why are you talking about Greece and China in the same sentence? The guy asked "could China have trouble defending their currency?" and the answer is "no, and it's not likely to be a problem in the first place" but you said all of this. What situation could even see a falling yuan anyway? The ruble fell because people stopped buying Russian exports all of a sudden. When is China likely to head into trade deficit? You brought the conversation in this direction talking about foreign exchange as if it mattered in this Chinese banking story, and you're just grasping to make yourself look like you said something relevant. "lose a grip on the Yuan entirely" seriously? For some reason this thread causes people to speak with certainty about international high finance.
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Apr 21, 2015 19:30
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asdf32 posted:For some reason this thread causes people to speak with certainty about international high finance. Considering the conventional wisdom when this thread started, there certainly are questions that need answering. Ardennes fucked around with this message at 20:02 on Apr 21, 2015 |
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Apr 21, 2015 19:51
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Mar 27 2014Ardennes posted:The ultimate question is going to be how much the Chinese government is willing (or is able) to tap those currency reserves, and ultimately the costs of propping up the banking industry.
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Apr 21, 2015 20:13
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