China Severs Its Currency's Link to Dollar

AP ^ | 7/21/05 | STEPHANIE HOO

[Boiler Plate]

I thought this was a looooonnnggg way off.

[JmyBryan]

China blinks. Another victory for the Bush Admin.

[GeekDejure]

I thought this was a looooonnnggg way off.

=======

You need to learn how to do Remote Viewing !!!

[bill1952]

The move could nonetheless help Chinese exporters' profits by cutting costs for imported oil, iron ore and other raw materials whose prices have been surging in dollar terms, Gong said.

Carefully buried in a sea of PC garbage, there is the reason.

[dfwgator]

I wonder if China is going to do this, knowing it could very well trigger inflation here in the US?

[oceanview]

if $2.75 gasoline isn't wrecking our economy, a 2.1% rise in the cost of a $12 shirt at walmart won't.

[Boiler Plate]

I had talked to several economist types here in DC and online and they basically told me China didn't even have the ability to do this let alone the desire. This is really going to shake things up.

[steve8714]

Most of our equipment for the manufacturing they do has been sold overseas, so why not? Now they can manipulate their currency to fit their expansionist plans.

[dfwgator]

But I do think the goal of the Chicoms is to get such leverage on the US economy, that they could ultimately manipulate it. They might not be quite at that point, yet.

[oceanview]

they can't take us down without destroying themselves. the US has all their customers.

[jpsb]

"they can't take us down without destroying themselves. the US has all their customers."

LOL, 1 billion Chinamen might disagree with ya there.

[FlatLandBeer]

Something is about to happen.

[Lazamataz]

This is HUGE.

[Lazamataz]

Something is about to happen.

They are too weak to fight us over Taiwan today.

[Boiler Plate]

1 Billion Chinamen making less than $1000 a year is not a huge market. The average chinese needed this so they could afford products from outside of China.

[Happy2BMe]

Why don't our bankers think like Chicoms?

======================================

China dropped its politically volatile policy of linking its currency to the U.S. dollar on Thursday, adopting a more flexible system based on a basket of foreign currencies that could push up the price of Chinese exports to the United States and Europe.

[Boiler Plate]

It is hard to say at the moment what the pros and cons are. The delta T at which the yuan is limited to will hopefully reduce any dramatic effects in the near future. I think in the long run it will allow the Chinese to buy a lot of things that they cannot not afford now. This could be both good and bad considering that money buys influence. It does however give the market forces and people who control those, new power. China has always been much more capitalist than its Communist brethren and hopefully it will mean a real middle class with political power.

[JohnnyZ]

Something is about to happen.

Something just did.

[JohnnyZ]

Why don't our bankers think like Chicoms?

Sever our currency's link to the dollar?