BRIC+ News & comments

Except that isn’t what the IMF, Joepistole, and most everybody else wish for, what they wish for is a free floating currency like every other SDR currency is, that is what the IMF, Joepistole and most everyone else wishes for and they haven’t gotten what they wished for. China remains a currency manipulator (e.g. the last 2 days) and extra bold and enlarged letters will not change that fact. The market should determine value, not the state.

These currency devaluations are a clear sign China is desperate. These devaluations are acts of desperation, not of strength. China’s leaders are fearful and rightly so. Their stock market is in free fall, exports are down and China is an export based economy. This is serious stuff. This is desperation. China is desperate and this likely isn’t the last devaluation.

The other factor clouding the issue here and driving fear is the lack of transparency in China. The outside world really doesn’t know with certitude the veracity of China’s economic statistics, because the country isn’t open or transparent. China has just begun a trade war. Given China's devaluation of its currency, I'd say the Fed should and probably will delay the expected increase in US interest rates.

 

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And you must understand, as I have often noted, China ALWAYS take tiny steps to make a change. They are not yet letting the market completely control the exchange rate, only drag it down slowly. That is HUGE change from a few days ago, when the CCP isolated the exchange rate from market forces. If there is no additional change in policy, there will be a smooth transition (center of variation band) dragged down to where ever the market wants it to be.

The CCP is like a shock absorber - damping out wild swings in exchange rate, limiting their magnitude in any one day, but not setting either a floor or a ceiling on their exchange rate. That is exactly what you, the IMF and most central banks have wanted /wished for. It is a responsible way to transition to market based rates. All central banks try to suppress wild swings. Most just act without an announced plan. China is showing how to avoid financial "shock and Awe" by limiting the daily changes.

 

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Well here is the deal, China wants the prestige of being a big boy but it wants to play by kindergarten rules. That isn't going to fly nor should it. If China wants big boy prestige, then it needs to play by big boy rules. And there really hasn't been any great change. What you cite, is just a continuation of existing Chinese monetary policy. There is NO huge change. What has occurred is a huge swing in China's currency valuation. Where is the "shock absorber" you claim exists? Letting its currency trade freely would be a BIG change.


The CCP isn't a shock absorber. As previously noted, wild swings in currencies are rare. As previously stated, the IMF, others and myself want a market based currency, where the market determines price rather than the state. We don't want shock absorbers. It I wanted a shock absorber, I would buy one. If China moves to a free market currency and transparency, then it shouldn't have "wild swings" in currency valuation. Two, I don't think you understand the role of a central bank. One of the responsibilities of a central bank is to maintain price stability (i.e. control inflation), that has nothing to do with currency manipulation (i.e. what China and continues to do). The US and the world previously operated under Bretton Woods which defined currency valuations. But Bretton Woods died in 1981. Big boys don't intervene to protect their currencies like China does, so no all central banks do not intervene as you asserted. And what China has done and continues to do isn't "responsible" as you have represented it to be. It took only a few days for the US currency to go from fixed to float. It didn't take decades as is the case with China.

If China wants big boy recognition and big boy prestige, then it needs to play by big boy rules. It really isn't that complicated. China is playing with fire and its likely to get burnt and burnt badly. It's trying to micromanage a trillion dollar economy.

 

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That was part of page 2. Page 1 included:
The central bank is fully capable of stabilizing the exchange rate through direct intervention in the foreign exchange market to avoid herd mentality leading to irrational movements of the rate," economist MaJun with the People's Bank of China said ... on Wednesday after the sharp decline.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the market and also refers to the closing rate on the previous day, in conjunction with supply and demand and the movement of major currencies. "

 

Chart (with text) here shows how tiny the recent correction (a slight devaluation) is compared to the HUGE upward evaluation of the yuan dollar exchange rate that has occurred earlier:
http://www.bloomberg.com/news/artic...-history-of-the-chinese-yuan-in-one-big-chart ... Unfortunately the chart will not post - go to Bloomberg link to see it.

IE at start of chart it took about two more yuan to buy a dollar than now. - Yuan is much more appreciated than devaluated, still. Despite the yuan being about 1/3 more valuable, China's exports have soared! Offering mainly high-quality, high-value-added, items like ipods, cell phones and computers instead of cheap shirts and hula-hoops, has more than off set the effect of the strengthening yuan.

Some (no make than "many") people post their false beliefs, unsupported opinions, as facts but I don't need to name names.

 

This "pod cast" made by Financial Times on the Chinese yuan and what more to expect is worth hearing, especially since the questions the speakers respond to come from the FT's Chinese branch. http://podcast.ft.com/p/2876?ftcamp...email&utm_term=china_trade&utm_campaign=19aug

Most interesting to me, was suggestion that China will cut dollar representation in its reserves from more than 60% down to only 42%, as part of the changes in dollar RMB ties. (said at 9:13 in the pod cast)

 

And you think that makes sense or is some how relevant? I cannot help but notice you are referencing China's state owned media. That really isn't credible, especially when it isn't consistent with other sources as is so often the case.

 

What China does with its currency reserves really isn't germane to the US dollar. There is this thing called the Federal Reserve which monitors and manage monetary policy. It expands the monetary supply and decreases the monetary supply as needed in order to maintain price stability and full employment. If China wants to lessen its US Dollar reserves, fine. It's no big deal.

 

First an earlier post, I made 5 January 2011, at http://www.sciforums.com/threads/bric-news-comments.84022/page-19#post-2671060:

Now it is not just US Navy intelligence that speaks of the so-called "carrier killer." The Chinese publicly displayed it in yesterday's 70 year aniversity Parade ! :

* Data in my earlier post came from: http://news.yahoo.com/s/ap/20110108/ap_on_re_us/us_us_china

Additional comments, added now: The DF-21D "carrier killer" is an HE* (not nuclear) "quasi-ballistic missile." I.e. Chinese Satellites would tell it where the US carrier is just before launch. It then flies to an exo-atmospheric point high above that location like a ballistic missile, but then looks down with both radar and optical imaging for the carrier. If found, as is probable as carriers can't move much in 10 minutes of so, it power dives into the captured image - very super sonic in its final approach and thus hard to hit with carrier's defenses, especially if maneuvering as it descends, as seems likely.

Quite possibly, China's new aggressiveness in the South China Sea - building airfields for its fighters, on re-claimed atolls,** etc. is related to the fact, China knows that the highest levels of US Naval intelligence were well aware of the capabilities of the DF-21D at the start of 2011. Lets hope neither side miscalculates how hard it can push the other; or if they do, they stop short of a nuclear exchange that would send both back to stone age, but a radioactive one, this time.

* HE = High Explosive. It would punch thru the carrier deck and explode deep with in the hull. I have doubts it could actually sink a Nimitz-Class carrier. That is very hard to do with single HE, but much, if not most, of the flight deck would be just pieces of metal sinking to the bottom if not the whole ship going there. All of the flight deck would be too warped for any regular winged aircraft to land on.

** China does not want or need to "project military power" which is the main role of an aircraft carrier. It is building near China, "unsinkable air fields" in the South China Sea. You can see this lack of interest in power projection in their GPS design too. The system's precise clocks are on land, not in the satellites. Thus China's GPS is ONLY for defense of China - can not guide a missile thru a selected window on the other side of the world, as US's GPS can.

 

Yes, we can now add ipods to the repertoire of hula hoops and plastic appliances that rapidly break down when you use them the way they're intended to be used. No, it's not enough to rescue the 21st century's no. 1 slave state from slowly choking on its own whips (and on the toxic waste dumped daily by friends of the commie party). 6.1% decline in exports and 14.3% decline in imports compared to last year, this is not someone's "unsupported opinion".

http://www.ibtimes.com/chinas-exports-down-61-august-imports-fall-143-trade-surplus-sharply-2086112

My predictions for the near to mid-term future based on my personal interpretations and theories on current events:

a) Chinese economic stagnation will accelerate in the coming months and years. Western nations ought to help the process along and force progress towards respecting basic human rights, but are unlikely to get off their lazy asses to do so.

b) China will instigate a limited regional war and seize territory in an obvious attempt to distract its people from the abundant political and economic failures of the governing fascists. The overwhelming majority of the nation's people will be dumb and naive enough to buy into it wholeheartedly, just like the Ruskies. America will be blamed for causing the war and anything that subsequently goes wrong, up to and including bad weather.

c) A US administration sharing President Obama's worldview will prove itself too cowardly to confront china or make the necessary economic sacrifices to bring it to its knees, and will openly lie to the American public and its allies about the virtues of appeasement. British leftists - egotistical and consternated as ever about big brother America being 100X mightier than the British Empire at its peak, and seeking at all costs to prevent even the smallest demonstrations of this supreme power - will throw their full backing behind noninterventionist policies, but will still blame America for not cleaning up the resulting aftermath.

 

so how big was your check? cause the level of pro PRC bullshit in there is epic. you claim that china doesn't want or need to project military power which is the role of aircraft carriers but ignore the fact china is trying to build a carrier fleet. fact it billy your either entirely ignorant about china's military goals or just delusional about them. china is behaving extremely agressively militazryly and your trying to white wash it. if the US was acting as china is you'd through a hissy fit over there actions. i'm getting really sick and tired of your dishonesty and hypocrisy

 

I had the same thought. Given BillyT's obsessive advocacy for Mother China one has to wonder if he is on the PRC payroll and a PRC agent.

 

seriously. are we supposed to take the claim that china isn't trying to project power with its military seriously. their building at least 2 more aircraft carriers and converting from a brown water navy to a blue water navy and he's trying to claim that china is just peaceful and isn't trying to project power. its freaking bs

 

Indeed, and it goes far beyond just Chinese militarism.

 

I'm getting tired of your ignorance.
IE China's GPS, by design, is ONLY for the defense of China, not capable of supporting global "power projection." (The required precise clocks are land based, not in the satellite - non functional when the satellites can not "see" three bases with clocks.)

China is slowly winning WWIII, which is an economic struggle for global power and influences. Clearly US is losing influence, even with its closest allies - see cartoon at end.
China is world's largest creditor nation while US is world's largest debtor nation. This grows worse each year as China has a chronic trade surplus but US has a chronic trade deficit. Most of what you (and other nations) buy, except food items, is made by China, worlds largest market for most things and world's largest importer as a result (and largest exporter too).

China is expanding its control of the South China Sea by building three air fields there on what were once useless tiny atolls, barely above high tide. They serve as "Unsinkable aircraft carriers," but are totally useless for global power projection. US's aircraft carrier are designed for global power projection. China has had for several years an operational "quasi-ballistic" missile that US Naval intelligence, believes can sink any US carrier up to 1000 miles from launch site in China. It uses HE, not nuclear, warhead and is ballistic to point high in space above carrier's position at launch. Then it power dives on its image (both visual if no clouds and radar) of the carrier at very high super sonic speed. The Carrier's radars can not look "straight up" - may not even know it is coming but the Aegis escorts can.

China has one small second hand aircraft carrier, which probably will never be far from China - It is for training pilots to land on the short fields China is now building on atolls. China knows it can not match US military might in a WWII type conflict. China plans to dominate the world economically, not militarily, but be "invasion proof." Next move is RMB as part of the SDRs.

US military is doing what most always do - Preparing to fight the last major war (WWII) again. - Oblivious to fact China is winning WWIII, an economic struggle. An all out hot war between China and US has no winner. Both would set back to "stone age" conditions except worse with the soil too radioactive to grow food.

To pretend these are not important facts is to stick your head in the sand, ostrich like.
In a war, it is better to know all you can about your potential enemy.
Prepare for him, not to re-fight WWII again.

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and i'm all ready tired of your intellectual dishonesty. If i'm so ignorant why have i shown you for a almost pathological liar and proganadist for the PRC? your the ignorant one billy boy.

Yawn. which once again does negate my point they are building a blue water navy which is by design to project power. again your dishonesty doesn't change facts.

china's economy may be getting ready to collapse. you keep repeating this with no real evidence and ignoring all the major warning signs of the chinese economy. i've seen your propaganda billy it doesn't impress me.

which are aggressive moves. despite your rather ignorant claims. i never said china is going for global power projection though that is what a blue water navy is for.

why don't you stick to economic doom and gloom for demcracies because you clearly hate free countries. your totally ignorant on military affairs. first of the carriers china has commissioned and almost finished are fairly large at around 60k tons. they are also planning on one around 110k the same size as the gerald ford class. china has already threaten it neighbors repeatedly with it military belying those claims. so right there 4 carriers. a few more and larger than the one small one you claimed. you really need to start learning i'm not one of your friends whose impressed by the big complex words you used. i'll fact check the shit out of you. and quite simply your fucking dishonest as all hell or lazy as fuck. the amount you get wrong is staggering billy so quit your temper tantrums and start actually backing up your ideas instead of repeating lies i can easily refute.


update based on more research: oh yeah that small second hand carrier you mentioned that is nothing of the sort. yeah its the single largest carrier outside of the US fleet. only the US fleet carriers are larger. seriously do you bother to research anything?

actually if you bothered to do any research instead of making comments based on your personal biases you'd know the Us has been moving away from equipment for a straight conventional war and building for asymitrical warfare. quite the opposite of your claims. outside of the gerald ford class most of the new ships are smaller vessals and the army and marine core newest vehicles are IFV's and APC's

your lies and misrepresentations aren't facts billy. facts are such things like the china is building up its carrier fleet. your frankly biased and uninformed opinions off of them aren't facts.

its a shame before you wandered onto topics near and dear to me i thought an intelligent if over pessmistic wonk. now thanks to your own laziness and dishonesty i see you for what you are. a biased dishonest crank to arrogant to admit any mistakes in your flawed views driven by a deep seated hatred of the western powers.

 

To give any credibility to that you must quote one of my "lies" - Yes quote - don't put words in my mouth like Joepistole often does without even telling the post number he claims I said something.

If you do, I'll try to defend it with more references.

 

To pjdude1219 If you can not quote me making even one lie, then apologize for calling me a liar.

 

Still waiting. Calling poster a liar, without any evidence, is against Sciforum's rules - reportable.

 

um i already showcased your lies. DO NOT THREATEN me because i bruised you danty little ego. but how about the one that i ready stated. you claimed china only has 1 small carrier. when they have 2 more getting ready to launch and at least 1 more in the pipeline. billy anyone willing to do the research could prove you lies about the chinese military which you continue to make and than run away. might i add a poster was banned for doing what you did the last time your lies about china were called out. changing the topic and running away claiming you never made the claim you did. but unlike you i'm honest i'll prove you lies. and than will you apoligize for calling me ignorant for being able to point out your lies. probably not your to arrogant for that.
http://swampland.time.com/2014/01/20/china-doubling-its-aircraft-carrier-fleet/
http://web.archive.org/web/20090526...com/english/Herald-asahi/TKY200812310046.html
https://en.wikipedia.org/wiki/Chinese_aircraft_carrier_programme#cite_note-asahi-2
http://news.usni.org/2013/05/08/the-future-chinese-carrier-force
http://www.rt.com/news/china-super-aircraft-carrier-634/

i mean for fucks sake billy china announced its plans to build a farly substantal carrier fleet years ago. that you remain ignorant of it shows either profound dishonesty or laziness.
this is just like you temper tantrum over your lies about how china became suadi arabi's biggest weapon supplier over the US when you didn't know it was the UK who was the main supplier and that china basicly offers next to nothing. so please spare me your self indulgant whining and start being honest and doing some damn research for change. I still remember your whining over your idiotic great lakes to south west canal idea. your complaints about getting called out on your piss poor research are old. if you don't want to keep getting called on them try being right for a change.

you mean like you defending your charge of china becoming suadi arabia's biggest weapon supplier by never mentioning china again and than lying about what you claimed when that was pointed out to you. face billy you dishonesty is naked to be seen instead of attacking me for showcasing it you should just stop misrepresenting things you clearly aren't willing to research in the first place.