sidney

Strong RMB, Yen Not Good for the World

The problem isn't too much appreciation in the RMB but rather its not enough; not even close. There is no way the RMB has appreciated enough for the Chinese middle class to replace the USA middle class in purchasing power. Clearly China can force the US to default at anytime by no longer purchasing US treasuries and floating(that is where gov't doesn't intervene) the RMB. Once the RMB explodes up the Chinese consumer can buy their own goods(this is where stuff is produced); they can import raw goods into China just like the USA did for decades while they produced the finished products. By delaying the appreciation of the RMB they are just assuring a more crushing defeat later for the USA. Enough already. The game is over. China won. Now stop making everyone suffer longer while you think you can move every last ounce of manufacturing to China. Haven't you gained enough capacity and US$ reserves? Is 2 trillion not enough? Aside from floating the currency China should allow its citizens to invest anywhere and travel anywhere. By letting the RMB float the Chinese citizens will want to come back to China thus you can drop the stupid ransom paid by every Chinese traveler abroad. The Chinese middle class needs to be able go visit the USA and rub their new found wealth around a bit. The Chinese investor needs to be able to choose where they put their money. Who are the old Japanese, European, or American's supposed to sell their assets to if the Chinese investor is locked behind the curtain. The WTO people should be fired for letting such imbalances exist with currency,travel, and investment restrictions in place. "Free travel" and "Free investing" should have been rock solid requirements for WTO's "Free trade". China will win WWIII without firing a shot as a result of the world going along with its "Free Trade/Locked RMB/Locked investment" strategy. Without a way for the Chinese consumer to get access to the surplus and send it back in some form(spending(imports or travel) or investment) China essentially is a vampire sucking the life blood of the world. Now that the US is so clearly "printing" money how long will the Chinese consumer tolerate the inflation that results from China printing RMB to give to the exporters in exchange for US$? Right now USA gets to export inflation to China. Of course right now deflation is rampant around the world so while that is true US should just kick 5-10 trillion US$ China's way and see how much we can buy before someone in China realizes we took them to the cleaners with funny money.