China Devalues dollar by 30%(But protects U.S. treasuries)

China Devalues dollar by 30%(But protects U.S. treasuries)

www.businessinsider.com

The trade imbalance between the US and China, a hot button between the nations for the last decade or so, is finally going to start to stabilize in the summer of 2011. However, it is doing so with a de facto devaluation of the US dollar and its buying power. The average American will see a spike in the price of everything from their favorite jeans and T-shirts, to the cost of some electronics.

(visit the link for the full news article)

Ok so seems i need the ATS financial sector to ring in on this but how is it possible to devalue a currency(dollar)and have it not have a negative influnce on our own economy

And also does this devaluing of the dollar make the dollar 30%
weaker across the globe or just in china,also how does this affect the other countries like Japan who are heavily vested in the dollar

Maybe I'm just not getting it.But how does devauling of a currency"help better relations"?

www.businessinsider.com
(visit the link for the full news article)

reply to post by alchemist2012


Wow, this seems very significant, and it kind of counteracts everything the FED did with their Quantitative Easing. This will be important to follow for the next few months. Our dollar store merchandise will now be $1.30?!?!

Originally posted by getreadyalready
reply to post by alchemist2012

 

Wow, this seems very significant, and it kind of counteracts everything the FED did with their Quantitative Easing. This will be important to follow for the next few months. Our dollar store merchandise will now be $1.30?!?!

So as the article stated how does this help the U.S.economy?

Congrats on the new position my friend

Just another reason fo Congress to pass their trade snactions on China to force them to revalue the Yuan. China just does not get it. For the most part we buy crap from them that is sold cheap here. If this all goes to crap, They are going to jeopradize their largest market.

Not to kntpick or anything, but there is a difference in a 30% devaluation of buying power, and 30% devaluation of the US dollar.

Definitely interesting, I'm not sure if they can actually pull it off just like that but in a time where the US dollar is so weak and other world economies are thriving well... it's definitely a sign that things are going to change.

But yeah, China is way too dependent on the US and this seems way too premature.

This is just a new spin on inflation.

The way they are propping this up and spinning it to look good for us, is that by China adjusting the value of the US dollar, natural inflation will occur with China-made goods.

This will, by the nature of the change, mean that cheap China goods will be a thing of the past, and we will see this impact as soon as spring of this year, no later than summer.

The way they say this will help the US, is that a lot of manufacturers will come back to the US since it will not be as cost efficient to do business in China after the devaluation. They also say this will help stabilize the currency market, but that remains to be seen.

This goes hand in hand with the announcement this week that banks in the US will be offering the Yuan.

Marching right into the NWO mouth of madness.

~Namaste

Originally posted by Xcathdra
Just another reason fo Congress to pass their trade snactions on China to force them to revalue the Yuan. China just does not get it. For the most part we buy crap from them that is sold cheap here. If this all goes to crap, They are going to jeopradize their largest market.

Not to kntpick or anything, but there is a difference in a 30% devaluation of buying power, and 30% devaluation of the US dollar.

edit on 20-1-2011 by Xcathdra because: (no reason given)

China will be just fine if the US crumbles... the rest of the world still needs goods that are made at the lowest possible cost, and just because we are their biggest consumer, does not by any means make us the only one.

Many other countries are coming up right behind us, like India, as a consumption based society and Europe is also an enormous consumer of Chinese goods, so they really have nothing to lose except perhaps a set back.

~Namaste

This is a way of ushering in inflation, while blaming the Chinese. Of course, we have had inflation, and we would feel it even more if we paid what the rest of the world (except OPEC countries/Venezuela, etc) paid for oil and heating fuel. But, we will see more inflation, and across the board price increases that we can blame on the Chinese.
The scam is designed in such a way as to lead the west out of the dollar as a reserve currency with a series of steps. Investors have to be convinced to hedge their dollar bets, into the Yuan. With this investment money, the Chinese economy is less likely to implode. You see, people have to ACCEPT the Yuan on an international stage, and that means western investors.
I see no benefit for Americans, but that is to be expected. We don't have a coherent or cohesive economic policy. We are at the whim of wall street bankers in a "pump and dump" scheme. That is our only export at the present time.

We are getting a balancing act between the debt based money, and china is taking 30% more value from our purchasing power. they take this as profit. it helps cover how worthless our dollars are becoming. and since we are lent most of our money now from china its another way for them to recoup their interest rates.

what this means for the us is our spending sprees in china will slow, forcing our economy to look elsewhere for cheap goods.

part of the reason we offshore shop, is because at current rates our american made goods are more expensive due to the commodity prices speculated out the wazoo, wall street. speculaters years ago determined how valuable the basics to make things are, and have already done this years into the future on other goods. so the prices we pay are in no way reflective of what an item costs today.

it almost costs as much to make goods as it is to sell them, after all the regulaters, banks, and other "taking a percentage due to commerce law" and other various groups are done getting their peice of profit before the end user even gets to purchase anything.

does that make sense?

reply to post by SonOfTheLawOfOne


All valid points, and would normally hold true if they had a Democratic form of Government. Since they dont, the loss of a 300+ million person market is a huge hit. American orders of chinese goods alone employs massive amounts of their people. You remove that from the equation, thats a lot of out of work citizens. There is no other coun try that could pick up the slack to compensate for lossing the American Market.

China already has internall issues with unemployment as well as discontent with the Government. As China continues to use the free market system, they are finding those who have wealth now, have different standards and demands. The Chinese Government would over react more than they usually do, and it will go down hill faster than it is now for them.

Contrary to the rosy picture they paint to the world about their economy and unemployment, the numbers they publish dont always support the data. The same holds true for the number of happy faces shown on tv.

China will NOT be fine.
China has incredible inflation, and many times the problems that Americans have.
China has subsidized their manufacturing sector to the detriment of other countries, but they have not really created much of a middle class. They are polluting their country in a massive way. They are in the middle of an economic bubble from hell.
They are relatively new to this whole capitalism thing. I suspect that they are realizing that the Yuan they are sitting on does no good just sitting there.

Thanks for posting...

Seems like this should be a major news story, but this is the first I have heard of it. But, I guess like most real news stories it will be mostly ignored by the media outlets... It is much more important to discuss the new American Idol judges..

If I were a local sheriff in a clandestine town somewhere I might say something like "That can't be good".
It isn't good, is it? How bad is it then?

But the major thing i can not understand and maybe you guys could help,How can they lower the spending power
by 30% and have it not affect the treasury notes?seems this is an oxymoron

any explanations would help

I ran this article by my brother, who happens to be an economist, and he thinks the u.s. is intentionally devaluing the dollar to soften up our debts and take some economic power from china.....while at the same time building relations and trade with india as a replacement for china.

Sounds plausible to me, and china has to counter our money printing with revaluation, but if inflation is the result of the tit for tat with china, then it effectively lowers our overall debt. We still owe the money, but the money isn't as valuable in the inflated world.

The qe move was mysterious, but this actually makes it look more strategic. Maybe there is some gray matter in washington after all?

reply to post by getreadyalready


Whereseems like the most pressing matter is repealing the health care bill not fixing the economy

reply to post by alchemist2012

They have to protect the dollar because they have so many of them. Remember, they don't USE the dollar, they use the Yuan. For every dollar they get by exporting goods, they have to CREATE more Yuan to pay their exporter industries, in Yuan not dollars. Result, inflation.
But, they can allow some non life-threatening injuries to the dollar, hoping that other countries don't see the injuries.
In other words, they want the dollar to retain value, because they want to spend their dollars on useful goods overseas, but in America, we will get LESS for our exports, in essence, exporting some of their inflationary problems. In a balanced economy, they would send their dollars over here for our Hollywood movies, our California wines, our Idaho potatoes, our Nebraska corn. But, apparently, we don't ask enough for those sorts of things. They can get them elsewhere, cheaper.
Will it work for them, I suspect it will work for the leaders of China, just as our economy only works for the "leaders" of our economy.

Originally posted by SonOfTheLawOfOne

Originally posted by Xcathdra
Just another reason fo Congress to pass their trade snactions on China to force them to revalue the Yuan. China just does not get it. For the most part we buy crap from them that is sold cheap here. If this all goes to crap, They are going to jeopradize their largest market.

Not to kntpick or anything, but there is a difference in a 30% devaluation of buying power, and 30% devaluation of the US dollar.

edit on 20-1-2011 by Xcathdra because: (no reason given)

China will be just fine if the US crumbles... the rest of the world still needs goods that are made at the lowest possible cost, and just because we are their biggest consumer, does not by any means make us the only one.

Many other countries are coming up right behind us, like India, as a consumption based society and Europe is also an enormous consumer of Chinese goods, so they really have nothing to lose except perhaps a set back.

~Namaste

Last I checked other countries were becoming wise to the overall scam. Take Brazil for example... They've started losing local merchants/ business to China same as the US.

reply to post by SonOfTheLawOfOne



Yes,but you must remember that many of the goods made in China for the U.S. are tailored (localized) for the market. If they want to switch to exporting to poorer regions like India,they will have change entire product lines as well as the quality and price points. Products must also meet any standards imposed. Not an easy thing to do and they may not be able to make near as much money in other markets. This could lead to massive down-sizing or outright closure of many factories.

Just my two bits,for what it's worth...