Dave Wrixon

Asian Production Networks: China's Exchange Rate Policies Could Hamper Their Growth

I think you will find that the Chinese are probably even more keen that the Americans to see the peg dropped. However, the US has precipitated a global crisis and the Chinese sensibly are trying to stabilize the boat before moving forward. There intended growth path will lead to Economic Dominance, whether that is explicit goal or not. It cannot be otherwise, they are just so much bigger than any developed country. Just as a strong Deutch Mark and subsequently Euro has been desirable for the German Economy, so it will be for China that ultimately supplants them. It is also becoming clear that US consumer is a lost cause and that providing him with cheap and easy credit is a waste of resources. It is certainly pointless selling to him for a loss. So the Yuan will appreciate against the dollar, and probably sooner than you think. Of course once a firm trend is set the Dollar will plunge rapidly falling even below fair value, which won't be very much anyway.

Have you seen how the Pound is performing lately? It seems to be going into tight correlation of with the Gold Price. When was the last time that happened? Mind you it is still unable to appreciate against the Czech Crown. Trust me the dollar is lost cause.

Emerging Asian Markets Will Fuel Commodity Boom - CIBC

Well China is Japan's biggest market so some good news there as well.

Whether you see the ensue downturn as a depression or not depends on your outlook to some extent. We are unlikely to see price drops in local currency due to induced inflation, although prices will drop in relation to internationally traded commodities including gold and against the currency of emerging nations. Naturally, this will be dismissed but there will be price deflation just not in an ever increasingly worthless dollar.

Your attempts to equate Europe's situation to your own and drag us all down with you is little short of touching, but it will have no bearing on the final analysis. America is insolvent. Several European countries have solvency issues, but on the whole the Eurozone is solid, if as often chided a little dull and boring.


On Jun 09 01:39 PM Donald Ingram wrote:

> China is already well on the road to recovery, as is India and the
> rest of the Asian economies (with the exception of Japan) riding
> along on their coat tails.
> The Western world were the first to experience the economic crises,
> and will be the last to recover, since the damage to the financial
> system is so deep and pervasive.
> Those nations with commodity backed currencies will fare much better.
> The western industrial sector will continue to have a much tougher
> time.

How Will the U.S. Stress Tests Impact Asia?

I am not really clear on what any of this has to do with Asia?