Obama Making Noise About Yuan Control

[dave9988]

undebatable that yuan is undervalued. can we take advantage of it somehow? what is the maximum u can leave the country with?

[hhgz]

"can we take advantage of it somehow?"

Yes.

[dave9988]

i dont want to guess about legal stuff in opening a bank account but just curious what i asked.

[Gary A]

A strong dollar is NOT in the best interests of the US. I think the international community is going to be very disappointed with Obama. I would guess that he will eventually turn to isolationist policies and protectionism. No way can the US allow the big three auto makers go belly up. That means that if international auto makers want to sell cars in the US, they better be building them in the US using US components. Manufacturing cannot be allowed to go offshore and the only way to prevent that is protectionism.

[Crushdepth]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

[Jingthing]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

Sino-American relations are the key to the world economy not completely breaking down (its on its way) and indeed the future of globalization itself. That is one reason Obama is pushing so hard for Geitner to be confirmed (in normal times he would have been dropped for his non-payment of US taxes) to be treasury secretary as he is an expert on Asian economic culture and also speaks Chinese.

Chimerica, its bigger and more important than most people realize.

Daily Telegraph

East Chimericans are savers; West Chimericans are spenders. East Chimericans do manufactures; West Chimericans do services. East Chimericans export; West Chimericans import. East Chimericans pile up reserves; West Chimericans obligingly run deficits, producing the dollar-denominated bonds that the East Chimericans crave. As in all good marriages, the differences between the two halves of Chimerica are complementary.

But isn't it kind of crazy for the Chinese to be lending money to Americans, who are on average roughly 25 times richer? Shouldn't it be the poor country that borrows from the rich to finance its industrialisation? Not any more. By piling up its holdings of dollar bonds, the People's Bank of China is not merely financing American profligacy. It is systematically slowing the appreciation of the Chinese currency, and hence keeping Chinese exports cheap and irresistible. At the same time, the PBOC is creating the ultimate stabilisation fund. When you have a trillion dollars in the locker, you are more or less immune to the kind of currency crises that caused mayhem in other Asian economies in 1997-98.

Edited January 25, 2009 by Jingthing

[Gary A]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

They won't do anything too serious to irritate the US. They know who holds the big hammer. They depend on exporting their products to the US and if Obama goes protectionist, their products will be taxed high enough to really hurt them.

[OriginalPoster]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

The Chinese did compromise to a degree though by changing the Yuan from being pegged to the USD to being pegged to a basket of currencies. That at least allows the Yuan to move in same direction that the market moves the non-USD portion of that basket, though perhaps not as far in the direction as what the free market would take it.

[flying]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

They won't do anything too serious to irritate the US. They know who holds the big hammer. They depend on exporting their products to the US and if Obama goes protectionist, their products will be taxed high enough to really hurt them.

Couldn't that go round & round tit for tat though?

Couldn't they then just sell/dump out of all the USD they have?

Obama has talked an awful lot about all the new jobs he is going to create.

That would suggest a bit of home grown products eh? Unless of course he want to employ the masses for what they have become really good at.....Professional Consuming

[VegasVic]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

They won't do anything too serious to irritate the US. They know who holds the big hammer. They depend on exporting their products to the US and if Obama goes protectionist, their products will be taxed high enough to really hurt them.

Couldn't that go round & round tit for tat though?

Couldn't they then just sell/dump out of all the USD they have?

Obama has talked an awful lot about all the new jobs he is going to create.

That would suggest a bit of home grown products eh? Unless of course he want to employ the masses for what they have become really good at.....Professional Consuming

Flying, It would appear that you have finally gone off the deep end I knew that you were a bit of a silver bug, but apparently you have gone over to the dark side along with all the fringe lunatic goldbugs Look for Obama to announce a capital gains holiday as part of his stimulus program, this will bring the money off the sidelines, out from under the mattresses and out of gold and the bond markets! It will also bring a large influx of foreign investment into the U.S. markets, which in turn creates an even stronger Dollar. This will be the harpoon that deflates the gold bubble It could be a rather costly experiment for the goldbug community, because as we all know once gold does deflate it usually stays down for years, perhaps even a decade

[flying]

Flying, It would appear that you have finally gone off the deep end I knew that you were a bit of a silver bug, but apparently you have gone over to the dark side along with all the fringe lunatic goldbugs Look for Obama to announce a capital gains holiday as part of his stimulus program, this will bring the money off the sidelines, out from under the mattresses and out of gold and the bond markets! It will also bring a large influx of foreign investment into the U.S. markets, which in turn creates an even stronger Dollar. This will be the harpoon that deflates the gold bubble It could be a rather costly experiment for the goldbug community, because as we all know once gold does deflate it usually stays down for years, perhaps even a decade

Vic ! Where have you been? You have not come around in awhile.

I thought it was because gold was doing so good you wanted to avoid me

You saw your predictions go poof eh? No worries you know I was always bullish on the metals.

Hey have you seen this yet?

http://money.cnn.com/2009/01/25/markets/su...ahead/index.htm

Gonna be a real cooker this week too eh? :jerk:

Ok stick around now & I hope you didnt dump all that gold stock you had around Thanksgiving? But you know I still wish you would grab some physical both AG & AU

I think you will be glad later

Edited January 26, 2009 by flying

[OriginalPoster]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

They won't do anything too serious to irritate the US. They know who holds the big hammer. They depend on exporting their products to the US and if Obama goes protectionist, their products will be taxed high enough to really hurt them.

Couldn't that go round & round tit for tat though?

Couldn't they then just sell/dump out of all the USD they have?

Obama has talked an awful lot about all the new jobs he is going to create.

That would suggest a bit of home grown products eh? Unless of course he want to employ the masses for what they have become really good at.....Professional Consuming

Flying, It would appear that you have finally gone off the deep end I knew that you were a bit of a silver bug, but apparently you have gone over to the dark side along with all the fringe lunatic goldbugs Look for Obama to announce a capital gains holiday as part of his stimulus program, this will bring the money off the sidelines, out from under the mattresses and out of gold and the bond markets! It will also bring a large influx of foreign investment into the U.S. markets, which in turn creates an even stronger Dollar. This will be the harpoon that deflates the gold bubble It could be a rather costly experiment for the goldbug community, because as we all know once gold does deflate it usually stays down for years, perhaps even a decade

Vic, would not a "capital gains holiday" be much the same thing as Bush's widely derided "tax cut for the rich", except for the fact that Bush only reduced longterm cap gains rates to 15% whereas a tax holiday would presumably mean a 0% rate?

Edited January 26, 2009 by OriginalPoster

[VegasVic]

George Bush made a lot of noises about Yuan valuation as well. The Chinese don't give a rats arse, they'll do what's best for them (and why shouldn't they).

They won't do anything too serious to irritate the US. They know who holds the big hammer. They depend on exporting their products to the US and if Obama goes protectionist, their products will be taxed high enough to really hurt them.

Couldn't that go round & round tit for tat though?

Couldn't they then just sell/dump out of all the USD they have?

Obama has talked an awful lot about all the new jobs he is going to create.

That would suggest a bit of home grown products eh? Unless of course he want to employ the masses for what they have become really good at.....Professional Consuming

Flying, It would appear that you have finally gone off the deep end I knew that you were a bit of a silver bug, but apparently you have gone over to the dark side along with all the fringe lunatic goldbugs :jerk: Look for Obama to announce a capital gains holiday as part of his stimulus program, this will bring the money off the sidelines, out from under the mattresses and out of gold and the bond markets! It will also bring a large influx of foreign investment into the U.S. markets, which in turn creates an even stronger Dollar. This will be the harpoon that deflates the gold bubble It could be a rather costly experiment for the goldbug community, because as we all know once gold does deflate it usually stays down for years, perhaps even a decade

Vic, would not a "capital gains holiday" be much the same thing as Bush's widely derided "tax cut for the rich", except for the fact that Bush only reduced longterm cap gains rates to 15% whereas a tax holiday would presumably mean a 0% rate?

The problem Obama is encountering is that while infrastructure spending is fine, it will not have any effect for at least 12-18 months from now. The reduction in withhollding taxes for the middle class is all fine and good and it will have an immediate effect, however it will only put an extra $20/week into the hands of the consumers and so they will buy $20 more of imported chinese goods from Walmart. The moderates on the Obama team realize that the velocity of money is at a standstill and they need to do something to get the money circulating again, hence the capital gains holiday or substantial reduction. It is true that the lefties won't like it but there are not many choices left In regards to the Bush tax cuts, the primary problem the democrats had was with the upper bracket being lowered, not so much with long term gains going to 15%. I think this capital gains tax holiday would only be for 18-24 months, so it would bear no resemblence to the Bush plan at all. As a matter of fact by the time that this gains tax holiday expires the Bush tax cuts will also have expired and I would expect the democrats to raise the upper tax bracket back to where it was and sadly they will mistakenly also put the LT cap gains tax back to 15% or perhaps even 22% if the economy seems to be back on its feet and the markets seem to be self sustaining. Its all about the velocity of money, with all the dead cash on the side lines, either in bonds, money markets, gold or just under the matress, they need to do something to entice the Dollars back into the economy

[flying]

I think this capital gains tax holiday would only be for 18-24 months

Folks are filing for 08 already. Are you thinking this would be for 09 then?

Have you seen anyone on the Obama squad actually say anything about this yet?

You know everything he does is going to be called a BOBO?

Barrack Obama Bail Out

[VegasVic]

Flying, It would appear that you have finally gone off the deep end I knew that you were a bit of a silver bug, but apparently you have gone over to the dark side along with all the fringe lunatic goldbugs Look for Obama to announce a capital gains holiday as part of his stimulus program, this will bring the money off the sidelines, out from under the mattresses and out of gold and the bond markets! It will also bring a large influx of foreign investment into the U.S. markets, which in turn creates an even stronger Dollar. This will be the harpoon that deflates the gold bubble It could be a rather costly experiment for the goldbug community, because as we all know once gold does deflate it usually stays down for years, perhaps even a decade

Vic ! Where have you been? You have not come around in awhile.

I thought it was because gold was doing so good you wanted to avoid me :jerk:

You saw your predictions go poof eh? No worries you know I was always bullish on the metals.

Hey have you seen this yet?

http://money.cnn.com/2009/01/25/markets/su...ahead/index.htm

Gonna be a real cooker this week too eh?

Ok stick around now & I hope you didnt dump all that gold stock you had around Thanksgiving? But you know I still wish you would grab some physical both AG & AU

I think you will be glad later

I've bought and sold the gold miners 4 or 5 times since mid October, and even shorted a couple of the miners 3 weeks ago when the POG got toppy, fortunately I covered on Monday when the tide looked to be turning their way The POG is looking toppy once again and I am looking to take another short position, but right now I am looking more seriously at taking a long position in BAC. I have been fortunate with my timing in the gold shares to the tune of about 142% overall ROI, but physical gold at this level is at best dead money, and more than likely you will take a 15-20% haircut over the next month or so! I still think that silver might be good long term and when it falls along with gold you could see it below $9/ounce again! I'm sorry to see that you have gone over to the dark side my friend, but as the old saying goes "you make your bed and you have to sleep in it"

[VegasVic]

I think this capital gains tax holiday would only be for 18-24 months

Folks are filing for 08 already. Are you thinking this would be for 09 then?

Have you seen anyone on the Obama squad actually say anything about this yet?

You know everything he does is going to be called a BOBO?

Barrack Obama Bail Out

Flying, There would be no point in making it retroactive, after all its all about getiing more money circulating now, so I imagine it will begin in tax year 2009

[flying]

physical gold at this level is at best dead money, and more than likely you will take a 15-20% haircut over the next month or so! I still think that silver might be good long term and when it falls along with gold you could see it below $9/ounce again! I'm sorry to see that you have gone over to the dark side my friend, but as the old saying goes "you make your bed and you have to sleep in it"

Haha Yes we will see my friend

Remember all the predictions you made back in the Gold thread?

Remember ?? Gold has reached its highest level for 09 etc etc?

Or back when.....

http://www.thaivisa.com/forum/index.php?s=...t&p=2470628

[flying]

Flying, There would be no point in making it retroactive, after all its all about getiing more money circulating now, so I imagine it will begin in tax year 2009

Huh? Getting more circulating now so active in tax year 09?

No that is more like a Bush move eh? Dont make me get my shoe off.

You know 09 is going to be a sheet year for making money. So that is when they want to give us a break on the money we are not going to make?

Oh forget it.....

Edited January 26, 2009 by flying

[Groongthep]

A strong dollar is NOT in the best interests of the US. I think the international community is going to be very disappointed with Obama. I would guess that he will eventually turn to isolationist policies and protectionism. No way can the US allow the big three auto makers go belly up. That means that if international auto makers want to sell cars in the US, they better be building them in the US using US components. Manufacturing cannot be allowed to go offshore and the only way to prevent that is protectionism.

You've been sequestered in Loei too long. All the major foreign automakers already have manufacturing plants in the US. Some have had them there for decades and most hire UAW member employees. Toyota had been exporting US made Toyota vehicles back to Japan for years until the recent worldwide slow-down. The only items that any administration, Republican or Democrat would consider slapping tariffs on would be products that directly compete with US made products like agricultural imports and steel. Nearly every first world nation has tariffs on imports of food and steel for internal security and political reasons. No French President, Japanese Prime Minister or US Senator from Iowa or Nebraska would ever get elected if they went against the extremely powerful agricultural lobbies in their home countries or US states. There is no reason the Obama administration or the former Bush administration for that matter would begin or increase any tariffs on parts or products that are not already made in the US unless it was in retaliation for unfair tariffs or trade practices on US products in another country. Trade wars almost always hurt both parties involved and that is why there is often lots of threats and posturing from trade representatives between nations with disputes but seldom to they ever actually occur.

Edited January 26, 2009 by Groongthep

[Gary A]

A strong dollar is NOT in the best interests of the US. I think the international community is going to be very disappointed with Obama. I would guess that he will eventually turn to isolationist policies and protectionism. No way can the US allow the big three auto makers go belly up. That means that if international auto makers want to sell cars in the US, they better be building them in the US using US components. Manufacturing cannot be allowed to go offshore and the only way to prevent that is protectionism.

You've been sequestered in Loei too long. All the major foreign automakers already have manufacturing plants in the US. Some have had them there for decades and most hire UAW member employees. Toyota had been exporting US made Toyota vehicles back to Japan for years until the recent worldwide slow-down. The only items that any administration, Republican or Democrat would consider slapping tariffs on would be products that directly compete with US made products like agricultural imports and steel. Nearly every first world nation has tariffs on imports of food and steel for internal security and political reasons. No French President, Japanese Prime Minister or US Senator from Iowa or Nebraska would ever get elected if they went against the extremely powerful agricultural lobbies in their home countries or US states. There is no reason the Obama administration or the former Bush administration for that matter would begin or increase any tariffs on parts or products that are not already made in the US unless it was in retaliation for unfair tariffs or trade practices on US products in another country. Trade wars almost always hurt both parties involved and that is why there is often lots of threats and posturing from trade representatives between nations with disputes but seldom to they ever actually occur.

As a matter of fact, before I made the move to Thailand, I owned a Honda Civic that was made in Ohio. My son works for Toyota in West Virginia. If you want an awakening, go to Long Beach California and look at the thousands of imported cars coming off the ships. Those are the vehicles that I am referring to. With a strong dollar, it's difficult for manufactures to move manufacturing to the US. The strong dollar was the point of my post.

[hhgz]

"i dont want to guess about legal stuff in opening a bank account but just curious what i asked."

With pressure from the US, the yuan has decreased in value approximately 20% over the past 42 months. You might think that future devaluations will come at the same extent and speed as the British pound. It will not. Although it is a strong currency, it is "soft", unlike the USD, Euro, or British pound. You can see this is virtually every foreign exchange office. The exchange rate is terrible, with the buy/sell rates giving you 30-40% less than you expected to receive.

The best way to make any sort of reasonable amount of money is to work in PRC, and receive your pay in yuan. When you transfer it out of the PRC, using the SWIFT procedure, you'll get a great exchange rate, and pay China bank fees of approximately 0.01%.

[OriginalPoster]

With pressure from the US, the yuan has decreased in value approximately 20% over the past 42 months. You might think that future devaluations will come at the same extent and speed as the British pound. It will not. Although it is a strong currency, it is "soft", unlike the USD, Euro, or British pound. You can see this is virtually every foreign exchange office. The exchange rate is terrible, with the buy/sell rates giving you 30-40% less than you expected to receive.

You mean increased in value, not decreased, right? The Yuan today is 6.85 per dollar. 42 months ago it was 8.12 Yuan per dollar.