Posted on 11/24/2004 9:03:01 AM PST by snowsislander
Beijing — In Chinese street slang, they are known as the “yellow bulls” — the underground traders who lurk outside the banks in aggressive pursuit of currency deals. But despite their business zeal, there is one commodity they are unwilling to buy on the street these days: U.S. dollars.
“Everyone is converting their dollars to Chinese yuan,” one black-market trader confided as he stood outside a bank in Beijing Tuesday.
“Our business is getting more and more difficult,” he said. “It's hard to find anyone buying U.S. dollars any more. The value of the yuan is definitely going to increase.”
I believe that some freepers live in China -- does this accord with what you are seeing?
Sounds like another, "Bush's fiscal irresponsibility is causing the crash of the dollar" article.
I think Bush needs to stop this asp!
Good news... China will be forced to let the yuan float.
That's what this article says that the street traders are betting on. I am curious if any other publications are running similiar stories about street traders or other informal exchange mechanisms that are running this way.
Soros pumped a lot of money into the election ... he isn't a man that wouldn't hedge his bets. Hmmmmmmmmmmmmmm
As is usually true in socialism/communism, the Chinese will believe they can control this. The dollar won't "officially" float. However, the tremendous power of reality will cause the black market to respond to the situation. There will be a two-tiered monetary system; the "official" value of Yuan-Dollar and the "real" value.
Happens all the time in "controlled" economies...to their dismay and ruin!
If the Chinese don't want dollars, I'll take them.
I saw a story last week that every chinaman was cashing in their stacks of dollars for yuan, in spite of bank rules against it.
They believe in Marx not Smith... always wrong.
The supply of dallar will become so big that they will be forced to let their yuan float.
"Sounds like another, "Bush's fiscal irresponsibility is causing the crash of the dollar" article."
One can argue about whether Bush's policies are fiscally irresponsible or not, but that the dollar is being traded like a discounted junk bond on foreign markets, underground or otherwise is a significant event.
The traders in China are betting that the yuan will have to float, given the fact that current US policy is not to intervene in currency markets on behalf of the dollar (which is a futile endeavor anyway).
The current policy, the current events and the response to them ARE Bush's responsibility. I think that expansion of government, unrestrained spending and election-year loose fiscal policy are a bad thing.
If you think otherwise, I'd like to know why you think it.
And the imported goods upon which we've become so heavily dependent will skyrocket in price, sending our own domestic economy down the sewer.
A dollar crash will be good for our domestic manufacturers and will turn around the consumer/debt mentality destroying the dollar.
BUMP
The report also said the recent inflow of capital to the Hong Kong market differs markedly from that of earlier this year as the market is placing far heavier bets on a yuan revaluation this time.
As the interest rate differential between Hong Kong and the U.S. has widened to more than 2%, big returns on these bets can only be realized through a yuan revaluation, it said.
As to the mention of the hedge funds someone made, they are more likely to be in a market like this rather than on the streets of Shanghai.
If American's stopped buying so much Chinese imported merchandise, things would be different. The consumer is solely to blame.
A falling dollar is good? How can you say that my net worth falling each day is good?
A falling dollar causes 'real' inflation and that is not to mention the prices of consumer goods made overseas. It is not like you can go out and buy an American made TV or even a Car that is entirely made in America.
However, the worst part of a falling dollar will be increased oil prices and OPEC's move to the Euro from the dollar. When this occurs, and it will, the US will have to Buy Euros in order to Buy Oil, thus increasing the value of the Euro and further decreasing the value of the dollar.
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