Posted 28 June 2010 - 04:50 PM
There are several articles touting how wonderful it is that the Chinese have "unpegged" the Yuan ... I've gotta' tell you that the Chinese concession to allow it to increase 6% is simply a ploy, as far as I'm concerned.
Those who scour DV will tell you that I am not a nay sayer so hear me out.
The problem for me is this ... China does not let ANYONE bully them. Clinton and Geitner went to China apparently to smooth ruffled feathers over our Iraqi friends tardiness in RV'ing. When they left, China postured with the equivalent of "no one tells us what to do!"
A few weeks later they are doing what Clinton and Geitner wanted them to do which was allow their currency to rise in value (RV). The Chinese came out and said, "OK, we are going to allow our currency to increase SLOWLY up to 6%". However, if you check their 52 week low and their 52 week high you will find that at the time they said this they were not at their 52 week low but close ... and it was 4.something % away from their 52 week high!!!!!!
In other words their normal channel including the 52 week highs and lows plus approximately 1.5% is what they ultimately agreed to do to assuage the feelings of the rest of the world.
To me that is typical China ... NO ONE BULLIES US ... NO ONE!!!!!!
The reason neither I nor my group have invested in Chinese Yuan is that it's upward swing was estimated to be no larger than 9%. IQD is estimated to be in the 10,000% to 38,600% range and the VND in the 1,000% to 6,000% range. (I might have missed a decimal but you get the point)
I don't disagree that the move is to start some kind of sequence or that it is a concession or that it is meant to put pressure on the Iraqis.
I saw an article today that the IQD could take the US out of debt in 4 years ... I don't know how they figured that ... but I'm for it ...
Folks I believe that it is going, that it is going soon, and that it will change millions of lives in Iraq and abroad ... I just don't believe that it is that big of a deal that I should go out and spend the money that I buy IQD every week (yes I do) on Chinese Yuan!