YUAN SEEN NOTHING YET
by Elaine Meinel Supkis
All sorts of funny stuff about the sudden switch of direction from the Chinese. I am suspecting the Chinese are going to encourage the Bush/Greenspan Skull and Bonesmen to believe that China jumped the dollar shark because they were terrified of all the bellowing from America. That they are a'fearful of that ol' briar patch! Yass.
Let's first go to the official news. From Xinhuanews:
Countries around the world welcomed on Thursday the Chinese government's decision to raise the value of its currency yuan by 2.1 percent and to replace its fixed peg to the US dollar with a tie to a basket of currencies.Heh. China has been carefully cultivating good will while doing what has to be done. So everyone shouts and yells and then they make a tiny move causing a cascade of praise and hoorahs. This is how one gages one's power. Nobody forced the Chinese to do anything. Neither governments nor corporate entities. If China were fearful and obedient satrapy, they would have rushed off to do this stuff instantly.
The People's Bank of China, China's central bank, announced it would trade its currency at a rate of 8.11 to the US dollar starting 19:00 (1100 GMT) Thursday, and the yuan to US dollar pegging system is switched to a basket of foreign currencies.
Over the past few years, the Chinese yuan has been pegged to the US dollar at the rate of one dollar for 8.27 yuan.
The move was immediately applauded by countries, especially the industrialized ones, around the world.
US Federal Reserve (Fed) Chairman Alan Greenspan welcomed China's decision to move to a more flexible currency system, calling it "a good start."
Instead, they did it in their own good time, and not really, anyway.
Hailing the decision as China's first step toward globalizing its economy, Japanese Chief Cabinet Secretary Hiroyuki Hosoda saidJapan respects the move by the Chinese government.Hahahaha. Forget the Chinese dying laughing. I think I will. OK, America. Think hard. What is going on here? Aside from the fact that we royally lost WWII against Japan, they own us, we don't own them, who manipulates their currency vis a vis the dollar so they can penetrate and destroy many of our industries? Take a wild guess.
"It must be the conclusion of the Chinese government having considered various things. We pay our respects to that," the top government spokesman said.
The Chinese know. It is in this same article. They put it there as a tease, I suppose, like me, they think, "Will anyone read this and understand? Heh."
In early New York trading, the yen and euro rose sharply against US currency. The dollar was buying 110.75 yen at 8:45 a.m., down from 112.91 late Wednesday, and the euro rose to 1.2193dollars from 1.2138 late Wednesday.Anyone been tracking the yen since we surrendered to the Japanese after 1982? Recall the build up to Bretton Woods II when we begged and pleaded with Japan to revalue their currency. They finally did this, and since they owned Ronald Reagan for the bargain price of a mere $2.5 million bribe, they got what they wanted.
Not a floating currency but a state controlled currency run dually by America and Japan. The deal was, Japan buys all our GOP generated debts and we let them decide the relative worth of our joint currency!
Never, never ever, has the yen gone below 100 to the dollar. It bounces around between that and 110 to the dollar. With a huge trade surplus vis a vis America, I will note that our government allowed them to manipulate the yen so outrageously, they dared to make it 112 to the dollar even as Toyota and Honda both claim they will not flood our car markets too much since they are happy with over 30% of it already! Whoopee.
When the dollar soared against the euro, the Chinese held tight but the Japanese did the most damage to us: they actually made the yen weaker supposedly vis a vis the dollar! This feat was hidden from view by all the co-conspiritors in America who deliberately hammered China while utterly silent about Japan. So Japan, which had the yen at 105 to the dollar during that time, brought it down even lower when no one was looking.
From the NYT:
China has abandoned one of the world's clearest currency policies, a tightly managed peg of the yuan to the dollar that had endured since 1997. China has chosen instead to adopt one of the world's most opaque currency policies, with a secret mechanism to reset the yuan's value each night.This article is so funny I have to control the urge to turn into the Joker and laugh permanently.
For nearly eight years, Beijing's leaders trusted in Alan Greenspan, assuming that where the dollar went, China could safely follow. Now China's rulers are putting their trust in a much less well-known central banker: Zhou Xiaochuan, the governor of the People's Bank of China, who must manage the more discretionary policy put in place yesterday. Starting with the Asian financial crisis in 1997 and continuing through the rapid economic expansion since then, China has allowed the yuan to vary less than one-hundredth of a percent from its peg of 8.277 to the dollar. That impressive stability helped prompt business executives and entrepreneurs from around the world to invest $60 billion a year in new factories and other operations in China. These investors were confident that they knew what those businesses and their exports would be worth in dollars.
Wanna know the "secret mechanism"? Take a wild guess.
They set the currency at whatever rate they want and when they want it. No longer does it ride the back of the tiger dollar, it is now hunting the tiger and will lurk in the tall bamboo, waiting to strike for it is the dragon.
Meet the dragon itself:
Does this man look dumb? Compare this picture with Bush. Or Greenspan. Frankly, Greenspan looks like he is going senile fast as far as I can tell. Or he is already dead and is a zombie. He doesn't look all that on the ball. This man looks like...you don't want to be stuck negotiating with him and not have all your stones lined up in a good configuration. He looks shrewd.
This man will, with close consultation with his fellow communist leaders, choose each day what the yuan will be worth the next day. They are now launching their nuclear money sub. It has MIRVs on board. Since they own about 30% of our own government and a huge hunk of the dollars we print every day is owned by China. Not one yuan they print is controlled or owned by the USA.
This is why our trade/budget is fatal. Not a problem but fatal.
Beijing's leaders never trusted Alan Skull and Bones Greenspan. They used him. He was a nifty tool. They studied him really good, they talked with the Japanese, they figured out how the Japanese manipulate their currency/trade with America and then applied this in spades to their intended victims: Japan and the USA. The Japanese alerted the USA to all this about six months ago. Heh again. They certainly waited a long time, didn't they? I will note here that China incidentally managed to create a trade surplus with Japan at this same time. Thus the urgency to go to America on the part of the Japanese. Despite all this, they still didn't stop doing what the Chinese are doing, either, they viewed this as an opportunity to give us the coup de grace.
Under the new system, the basket of currencies used to set the value of the yuan would be known to only Chinese authorities, though it is widely expected to include the euro and the Japanese yen. From the Washington Post:
China said Thursday, July 21, 2005 it will no longer peg its currency, the yuan, to the U.S. dollar but instead let it float in a tight band against a basket of foreign currencies. The yuan has been strengthened, effective immediately, to a rate of 8.11 to the U.S. dollar - compared to the 8.28 it has been set at for more than a decade - and the new trading regime will begin.The WP article isn't as demented as the NYT one. I wonder why. One very demented thing they do include is the stupid, hoary, old line: China doesn't want so much foreign investment or money flowing in, it is growing too fast.
Widening the band in which the yuan trades allows China to adjust to the foreign investment inflows that have been pouring into the country. Such investment, combined with China's swelling export earnings, has pushed the country's foreign exchange reserves beyond $600 billion, sowing worries about over-investment and inflation.
"China needs a flexible exchange rate to take off speculative pressures," said Jonathan Anderson, chief economist at UBS Investment Research in Hong Kong.
If they were so worried about growing fast, they would import Bush and have him ruin the economy for them. And who is desperately inflating all sorts of things in a vain effort to get growth?
Duh. We are screwing around with the entire planet as we thrash about, trying to grow nothing. This week's news is all about yet more corporate layoffs. 36,000 here, 14,000 there, soon no one will work for American corporations...in America.
America is sopping up 60% of the world's financing. Far from screaming, "we should not do this, it is bad," we bellow, "we are number one, it is good!" even as every American "economist" solemnly swears that China should stop doing what we are doing because it hurts China. Laugh along with me. Ha ha.
China has been loath to remove controls on the movement of money, cognizant that a surge of speculative investment into real estate followed by a hasty dash for the exits delivered Asia's last financial crisis. China avoided the devastation in large part because of its fixed currency and strict capital controls -- a policy that then drew words of gratitude from the United States.Words of gratitude. We don't control our own fates because we don't want to pay the price of freedom.
Freedom doesn't mean you get really rich fast without working. It usually means lots of sacrifice and work but in the end you are strong, not weak. We are weak.
China watched the "hasty dash to the exits" during a currency crisis. They and they alone, have stood firm and they are seen as stalwarts. America is a manipulative country that deliberately messes with our currency, note how we deliberately drove it down in value when our European allies refused to go to war! We taught them a lesson! Which is why they have much more business with China today than back then. Why do business with someone who will shaft you over political matters?
The coming "hasty dash to the exits" will happen to the good ol' USA. I can't tell when, but you can bet, if the Chinese send war ships to stop the Japanese from drilling in disputed grounds, we will be forced to either stand down and let the Japanese shoot it out with China...and they will lose...or we side with Japan and have WWIII and of course, bankruptcy.
The Chinese are feeling our pulse. Will we side with Japan? They frown and weigh their options which are deep and considerable. All people sacrifice when their governments go to war. The Chinese people don't like the Japanese right now. They don't like us very much, either. Thanks to Bush.
So on with the Great Game of Go.
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