Posted on 10/14/2010 6:56:45 AM PDT by blam
RUMOR: China And US Working On Deal To Make QE Smaller, Yuan Appreciation Bigger
Gregory White
Oct. 14, 2010, 9:33 AM
China and the U.S. are working on a deal that would see a smaller second round of quantitative easing in the U.S. in exchange for a more aggressive revaluation of the yuan, according to a rumor tweeted by Neil Hume of FT Alphaville.
Obviously, this may just be that, a rumor. But gold has moved lower in the past few minutes, and that may have something to do with the rumored deal-making.
[snip]
(Excerpt) Read more at businessinsider.com ...
this sudden downdraft in the dollar which was created by the Fed has really got ‘em spooked. Who knew that World War III would be fought with currency and not nukes?
I don’t see any tweet about any such rumor at FT Alphaville or Hume’s tweet page. Is Business Insider lying again?
Calling BS on this one. The Chinese government takes a very long term view of things (think “centuries”) and they will make their own moves in their own time. Besides, who would they “work with”? Hillary? Tax-cheat Tommy?
I don’t know if this is a credible rumor or not, but IMO it wouldn’t be a bad thing if it came to pass.
Sounds like a good idea. China wins by having the debt it holds be more valuable, we win by having what’s left of our industry be more competitive. Thing is that the higher prices on Chinese goods will be inflationary. All actions short of cutting the deficit and taxes seem inflationary.
There is talk of restricting capital flows—which is not covered under the WTO. If Japan and the US teamed up on this, China would have no place to invest its hoard of US Dollars.
The argument is this: If you want free trade from us but restrict free trade on your side, then perhaps we will restrict capital flows which we have every right to do. Many contries hav capital flow restrictions, e.g. Brazil. So China, you can’t have it both ways.
I suspect this is the real strategy—and a very large sledge hammer to negotiate with. Gold prices, look out below.
Might be true - but it has the feel of ‘tactic’...
So, instead of devaluing our own currency, we’ll let the Chinese devalue it for us - do I have that right??
Calling Dr. Kevorkian!!!
It was being fought by only one side for some time.
Finance / Currency bump for later.........
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