Why we must wait to free-float the renminbi (China)

FT ^

[maui_hawaii]

An article designed for the select few and definately not the majority.

Here is a novel idea: Lets have Phillips do things differently.

[maui_hawaii]

This is exactly the kind of special interests that are running things.

[RS]

Because all of Clinton's payoffs are still in renminbi ??

[maui_hawaii]

Its more like the corporations paid off Clinton and most of the Senate and others for certain 'allowances' in regards to China. They got their 'allowances'...but pretty soon those 'allowances' will be taken away. The corporations like the one mentioned above don't want their buy-offs to be money wasted.

I say Phillips can burn.

[maui_hawaii]

What is more, to the extent that a rising currency makes China less competitive as an exporter and as a destination for foreign investment, other emerging economies with low wages and high labour productivity, such as Vietnam, would probably benefit more than the west.

That is a good thing. A VERY good thing.

Secondly it would benefit the US in the short term as well as the long. US manufacturing would instantly become more competitive. It also would stem the drain and allure of huge falsified profits by moving to China.

Over the past 15 years, many western companies have made huge investments in China in both production and research and development. For scores of large multinational companies, China is now an integral part of their supply chain and an increasingly important market.

There is a solution. CHANGE the way Phillips does business. These global companies tout that they are ahead of the game by going global... they say change is inevitable... I say lets give them some change themselves.

Change is ok unless they are the ones having to deal with the downsides to it.

Its ok to screw someone else’s business, just not mine…that should be his motto.

I could care less what happens to Phillips.

[maui_hawaii]

This is just corporations looking for a hand out.

If change is positive and good, whats good for the goose is good for the gander.

Lets make globalization work the other way and see if they like it. Lets put them in the vice and see whether or not they think its such a good deal.

[Poohbah]

They're like Enron. How in the hell could Enron go broke wheeling power to California?

Answer: lose a little money on each of those transactions to get "market share," then invest billions of cash flow that you don't have into unproductive assets. And that, on a larger scale than Enron ever thought of, is EXACTLY what the ChiComs are doing.

[RS]

"I say Phillips can burn."

I was thinking backwards... the currency and therefore products would become MORE expensive..

So by keeping it low we are giving them even less of our green pieces of paper for their VCRs

I better make that trip before the rates go up ...

[Moonman62]

Currency pegs to the dollar almost always end up in disaster, but it's usually the dollar that's overvalued.

[maui_hawaii]

If the Chinese economy were to go off the rails, it would not be long before the US and Europe shared the pain.

We are already feeling the pain of it going ‘on track’. Its time for these companies to feel our pain too. These companies' interests are not the same as my interests. Screw them. Pain is fine unless its happenening to them.

A financial crisis in China could well mean fewer jobs in China, fewer jobs in the US and fewer jobs in Europe.

BS!!! It will only be that way if these companies refuse to go with the flow and change. As Bruce Lee said, "Be water my friend..."

They should not have over invested in China in the first place. They made a hard bed, now they should sleep in it.

[RS]

"Secondly it would benefit the US in the short term as well as the long. US manufacturing would instantly become more competitive. "

Yep a US made VCR would only cost 5 times as much instead of 10 times...

Silly me, there are no US made VCRs ... and still would not be... US consumers would simply pay twice as much for the same thing - while paying twice as much sales tax of course...

[maui_hawaii]

You seem to think we buy things from China with US dollars.

[maui_hawaii]

Kind of, but not exactly.

[maui_hawaii]

Overvalued compared to who and what?

[RS]

You seem to think we buy things from China with US dollars.

My company does - they give us a price in dollars, our bank takes that many dollars from our account - the goods show up...

How do you work it ?

[maui_hawaii]

Don't start that crap on this thread.

[Moonman62]

Overvalued compared to who and what?

Look at who is doing the intervention and which currency they are buying.

[maui_hawaii]

And your supplier makes a bunch of stuff, and the payment mgically shows up in RMB and they are off with it.

You really want me to explain how it works?

Shall I start with the fundamentals of global trade and banking?

[RS]

"Don't start that crap on this thread."

Excuse me ?

Perhaps you can tell me where an American company is even in close competition with a compareable Chinese product.

Or perhaps even , oh, lets say five products that would be effected by even a 5 times increase in the remandi ?

[maui_hawaii]

Looks to me like a whole lot of people are intervening. Explain your post.