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More from Chanos on China: One of the most "obvious, obvious trades" - a rising renminbi - could...

More from Chanos on China: One of the most "obvious, obvious trades" - a rising renminbi - could go the other direction (video, 1:35) as part of nationalizing bad real estate debts. (ETFs: CNY, CYB; earlier)
Comments (1)
  • RMB is neither undervalued nor overvalued - it is a controlled currency. The RMB rate is how much the Chinese government wants to charge the US for its exports, and how much they are willing to pay Brazil and Australia for their imports.

     

    A falling RMB will make exports cheaper, and hence make Chinese products more attractive to the rest of the world. More foreign investments will then go into China to build factories, further enriching the middle class. If the RMB falls, I would rather short the shares of developed countries, because they will start borrowing and buying again. After all, you won't find a bunch of teenagers in China spending money to buy an iPad and then smashing it just to make a statement. I wonder if that iPad was bought on credit ...
    8 Apr 2010, 11:13 PM Reply Like
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