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Yuan pushes to record high against greenback. [Copy link] 中文

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Post time 2013-8-11 16:31:30 |Display all floors
abramicus Post time: 2013-8-11 16:05
In war, if N stands for the number of fighting units, and M stands for the firepower of each unit, t ...

The dreams of upgrading from shoddy work to quality work has remained a dream


In the meantime the environment is destroyed.


Dead end.

Past useful life.
I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2013-8-11 16:39:00 |Display all floors
China does not do shoddy work.  China's workmanship is world class.  But China should not lose sight of the fact that because it can do more, its products are naturally cheaper to produce, even if its technology is not the latest.  Large numbers makes products cheaper to produce and easier to sell.  This cannot be duplicated by technology alone, and in a head to head contest, numbers win all the time.



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Post time 2013-8-11 16:43:09 |Display all floors
abramicus Post time: 2013-8-11 16:39
China does not do shoddy work.  China's workmanship is world class.  But China should not lose sight ...

Slave labor is for slaves.

Quality work needs new mind set.
I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2013-8-13 16:04:58 |Display all floors
This post was edited by abramicus at 2013-8-13 16:10

THE CHINA DREAM OF THE YUAN BECOMING AN INTERNATIONAL RESERVE CURRENCY IS BEING USED BY DEVELOPED COUNTRIES TO UNDERMINE THE CHINESE ECONOMY

Face it, all the reserve currencies of international spread have had to be empires at the time their currency was used internationally.  Especially fiat currencies.  There is no other reason countries would accept them as their reserve currency unless they were forced to.  Period.  China cannot "earn" reserve currency status by "playing ball", unless it imagines being a butler in a mansion is a matter of pride and privilege.

China can "earn" its "most favored secondary international currency reserve" status by allowing the Yuan to keep appreciating, UNTIL its foreign currency reserve is all used up in buying up yuans that foreign investors earn in China that they want to repatriate back in dollars.  Until then, there will be "hints" that the Yuan might become an international reserve currency.  But for developed countries to accept the Yuan as payment in full?  You must be kidding.  What will they do with their own currency if that is the case?  Bolster it up by buying it with their Chinese yuan reserves?  You must be dreaming.  

China can invest its excess foreign curency reserves, but it has no reason to keep giving it away by keeping the Yuan overvalued day after day, allowing foreign investors to repatriate more of it at the expense of Chinese savings, in the vain hope that one day, China can just print as many yuans as it pleases that foreign countries will accept as payment for their goods and services, i.e, that it will be "allowed to be an international reserve currency".  That status is earned not by giving away one's foreign currency reserves, but by winning territories and maritime rights, on the order of conquest and control, altogether beyond the realm of monetary economics.  It is based on the right of conquest, and cannot be bought, because it is priceless, literally and figuratively.


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Post time 2013-8-13 16:19:15 |Display all floors
Like it or not, Yuan will inevitably become the preferred reserved currency replacing USD.
Please don't shoot, I'm just a babe.

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Post time 2013-8-13 16:23:42 |Display all floors
correction Post time: 2013-8-13 16:19
Like it or not, Yuan will inevitably become the preferred reserved currency replacing USD.

Maybe in 100 years.  The current Chinese banking system does not have the sophistication to support the yuan as a reserve currency.  Too cumbersome and controlled by the CCP.

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Post time 2013-8-13 17:46:04 |Display all floors
This post was edited by abramicus at 2013-8-13 17:48

Reserve currency status does not come with mere productivity, even if productivity does make one's currency a desirable reserve currency for other countries, because they can bank on exchanging it for something they need, or more importantly, they can use it to pay another third country for things they wish to import.

China is probably hoping that by sacrificing some of its currency reserves in bolstering the Yuan at a higher exchange rate than appropriate for its manufacturing industry, it can move from manufacturing goods to manufacturing an international reserve currency, one that would be worth more than all the exports China could ever produce, following in the footsteps of Britain in the early 20th century, and of America in the second half of the 20th Century and on.  This is a pipe dream.  Fiat currency for the world depends on establishing first, FIAT of rule, i.e., conquest, and nothing short of it.  There never has been any international reserve or fiat currency without the issuer being also the conqueror of all.  It is also particularly distressing, in that China is already sacrificing its manufacturing potential in order to achieve what this very same potential is supposed to achieve - international reserve currency status.  This is what over-reaching means.  China is standing on a pedestal high up in the hierarchy of economies, and in trying to reach for a higher ledge with its arms, it loses its footing on the edifice, and right now, has barely a toehold on its manufacturing potential, as the overvalued Yuan continues to force it off its secure footing, day by day, millimeter by millimeter, until Chinese manufacturing crashes.

In the meantime, foreign investors in China are repatriating their earnings like bandits, with loads of free dollars given to them by the PBOC, out of its futile hope that such largesse would earn it the right to print fiat money for the whole world.  Not only is it an unattainable dream, it would end up being an intractable nightmare for China's economy, and could lead to its political destabilization, just as Perestroika destroyed Russia in the end.

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