For anyone who bitched about the falling US dollar - GoFuckYourself.com

Greg Jacobson · 04-21-2005, 08:55 PM

here is an opportunity to protect from and even benefit from further losses.

http://www.kitco.com/weekly/paulvaneeden/apr182005.html

Will China allow its currency to appreciate?
April 18, 2005
Central to the thesis that the gold price will continue to rise on the back of a falling US dollar, is the premise that China will forego its policy of supporting the dollar in favor of letting its own currency, the renminbi, appreciate. Both China and Japan are accumulating massive amounts of dollars as a result of their trade surpluses with the United States. But instead of selling those trade dollars into the foreign exchange markets, they, and other countries, are hoarding the dollars and investing them in US Treasury securities. As a result the US dollar is currently trading at a much higher exchange rate than it should versus the renminbi, the yen, other Southeast Asian currencies and, in fact, most currencies.

Many people have argued that China will not allow the renminbi to appreciate against the dollar because it needs US consumption to drive its fledgling economy. But pressure is mounting from Europe, the United States, the World Bank and the IMF for China to let its currency appreciate.

The contention is that Chinese exports have an unfair advantage in the world because the renminbi is undervalued in foreign exchange markets. The undervaluation is a direct result of China?s dollar-hoarding policy, since it keeps the trade dollars that China receives every day off the market.

Support is growing in the US Senate for taking tariff action against China. The US trade deficit with China totaled $29.12 billion for only January and February of this year. That is a fifty percent increase from last year. The US trade deficit with China is now the largest of any country and almost double the size of the trade deficit with Japan, which is second.

The appointment of a new US trade representative is being blocked until Senate leaders vote on anti-subsidy laws against non-market economies such as China. In addition, a wide coalition of senators is backing legislation to impose a 27.5% tariff on all Chinese products entering the US if Beijing does not agree to raise the value of its currency.

If China does not allow its currency to appreciate against the dollar, and if the US goes ahead and implements the tariffs, all Chinese goods will become 27.5% more expensive for US consumers. On the other hand, if China allows its currency to appreciate, let?s say by the same amount, 27.5%, then its goods would be no more expensive to US consumers than if tariffs were imposed. However, the cost of all China?s imports would fall by 21.6% if it allowed its currency to appreciate by 27.5%. So what do you think China is more likely to do? Give the US government a revenue stream equal to 27.5% of the value of all Chinese imports to the US, or reduce the cost of its own imports by 21.6%?

The Chinese have always struck me as intelligent and practical. I suspect that China is going to let its currency appreciate. This not only means that the US dollar is going to fall, it also implies that US interest rates are going to rise because if the Chinese (and Japanese) no longer have to keep their trade dollars off the market to prevent the US dollar from falling they will also not need to buy as many US Treasuries as they have in the past.

It?s all starting to come together. The next big upward move in the gold price will occur when China and Japan allow their currencies to appreciate and the dollar to fall. I have no idea whether it will be this year, or next, but I do believe the current decline in gold and gold related equities represents an opportunity.

pornguy · 04-21-2005, 08:59 PM

I wish that I had the cash to put into it. But I dont.l

uno · 04-21-2005, 09:01 PM

a 27.5% tariff? That will never fucking happen.

Greg Jacobson · 04-21-2005, 09:05 PM

Quote:

Originally Posted by uno

a 27.5% tariff? That will never fucking happen.

Regardless, it is just a matter of time before China floats their money.

Wolfy · 04-21-2005, 09:12 PM

I'm lost on this, I haven't studied it at all. If one were to invest money in this - where does it get invested? The Renminbi?

Brujah · 04-22-2005, 03:20 AM

Invest in US Bonds.

DarkJedi · 04-22-2005, 06:12 AM

If the US doesn't weaken the dollar against the Chinese, their cheapness will eventually drive everyone in America out of business, as it will be impossible to compete with their prices.

If the US does weaken the dollar against the Chinese, suddenly everything imported (eg., just about everything) gets more expensive, inflation shoots up, and then interest rates go up, fucking everyone with debt.

Either way, US = fucked.

AdPatron · 04-22-2005, 06:16 AM

I don't care about the dollar.

ezrydn · 04-22-2005, 06:16 AM

Mexico won't allow Chinese stuff into the country. As for the "falling dollar," I could care less. My money stays in the US and I use my debit card down here to withdraw Mexican pesos. Right now, the exchange rate between pesos and dollars is 11.69:1.

This money fluctuation shit is allowing me to live like a king. New car, New 2-story, 3-bdrm, 3-bath w/jacuzzi home and a new Harley.

Keep it up world. Works for me.

EmporerEJ · 04-22-2005, 10:17 AM

I'm not bitching...doesn't affect my US customers, and since our product is made in the USA and contains mostly US parts, we benefit by the lowered international barriers to buying our product.
It's like we are running a 20% off sale overseas....

Go EURO!

EmporerEJ · 04-22-2005, 10:18 AM

Quote:

Originally Posted by DarkJedi

If the US doesn't weaken the dollar against the Chinese, their cheapness will eventually drive everyone in America out of business, as it will be impossible to compete with their prices.

If the US does weaken the dollar against the Chinese, suddenly everything imported (eg., just about everything) gets more expensive, inflation shoots up, and then interest rates go up, fucking everyone with debt.

Either way, US = fucked.

Again...classic case here.....BUY AMERICAN!

04-21-2005, 08:55 PM	#1
Greg Jacobson Confirmed User Join Date: Nov 2004 Location: Los Angeles Posts: 812	For anyone who bitched about the falling US dollar here is an opportunity to protect from and even benefit from further losses. http://www.kitco.com/weekly/paulvaneeden/apr182005.html Will China allow its currency to appreciate? April 18, 2005 Central to the thesis that the gold price will continue to rise on the back of a falling US dollar, is the premise that China will forego its policy of supporting the dollar in favor of letting its own currency, the renminbi, appreciate. Both China and Japan are accumulating massive amounts of dollars as a result of their trade surpluses with the United States. But instead of selling those trade dollars into the foreign exchange markets, they, and other countries, are hoarding the dollars and investing them in US Treasury securities. As a result the US dollar is currently trading at a much higher exchange rate than it should versus the renminbi, the yen, other Southeast Asian currencies and, in fact, most currencies. Many people have argued that China will not allow the renminbi to appreciate against the dollar because it needs US consumption to drive its fledgling economy. But pressure is mounting from Europe, the United States, the World Bank and the IMF for China to let its currency appreciate. The contention is that Chinese exports have an unfair advantage in the world because the renminbi is undervalued in foreign exchange markets. The undervaluation is a direct result of China?s dollar-hoarding policy, since it keeps the trade dollars that China receives every day off the market. Support is growing in the US Senate for taking tariff action against China. The US trade deficit with China totaled $29.12 billion for only January and February of this year. That is a fifty percent increase from last year. The US trade deficit with China is now the largest of any country and almost double the size of the trade deficit with Japan, which is second. The appointment of a new US trade representative is being blocked until Senate leaders vote on anti-subsidy laws against non-market economies such as China. In addition, a wide coalition of senators is backing legislation to impose a 27.5% tariff on all Chinese products entering the US if Beijing does not agree to raise the value of its currency. If China does not allow its currency to appreciate against the dollar, and if the US goes ahead and implements the tariffs, all Chinese goods will become 27.5% more expensive for US consumers. On the other hand, if China allows its currency to appreciate, let?s say by the same amount, 27.5%, then its goods would be no more expensive to US consumers than if tariffs were imposed. However, the cost of all China?s imports would fall by 21.6% if it allowed its currency to appreciate by 27.5%. So what do you think China is more likely to do? Give the US government a revenue stream equal to 27.5% of the value of all Chinese imports to the US, or reduce the cost of its own imports by 21.6%? The Chinese have always struck me as intelligent and practical. I suspect that China is going to let its currency appreciate. This not only means that the US dollar is going to fall, it also implies that US interest rates are going to rise because if the Chinese (and Japanese) no longer have to keep their trade dollars off the market to prevent the US dollar from falling they will also not need to buy as many US Treasuries as they have in the past. It?s all starting to come together. The next big upward move in the gold price will occur when China and Japan allow their currencies to appreciate and the dollar to fall. I have no idea whether it will be this year, or next, but I do believe the current decline in gold and gold related equities represents an opportunity.

04-21-2005, 08:59 PM	#2
pornguy Too lazy to set a custom title Industry Role: Join Date: Mar 2003 Location: Homeless Posts: 62,911	I wish that I had the cash to put into it. But I dont.l __________________ PornGuy skype me pornguy_epic AmateurDough The Hottes Shemales online! TChicks.com \| Angeles Cid \| Mariana Cordoba \| MAILERS WELCOME!

04-21-2005, 09:01 PM	#3
uno RIP Dodger. BEST.CAT.EVER Industry Role: Join Date: Dec 2002 Location: NYC Area Posts: 18,450	a 27.5% tariff? That will never fucking happen. __________________ -uno icq: 111-914 CrazyBabe.com - porn art MojoHost - For all your hosting needs, present and future. Tell them I sent ya!

04-22-2005, 03:20 AM	#6
Brujah Beer Money Baron Industry Role: Join Date: Jan 2001 Location: brujah / gmail Posts: 22,157	Invest in US Bonds. __________________ Free Premium Domain Lists and Tools at Clickmojo.com For Sale: Obscenity.com

04-22-2005, 10:17 AM	#10
EmporerEJ Confirmed User Join Date: Jan 2004 Location: Political subdivision United States, Continent North America, Planet Earth, Sol System, Milky Way Galaxy Posts: 282	I'm not bitching...doesn't affect my US customers, and since our product is made in the USA and contains mostly US parts, we benefit by the lowered international barriers to buying our product. It's like we are running a 20% off sale overseas.... Go EURO! __________________ Eric J. White Earn $$$ with the Virtual Sex Machine Affiliate program!

04-21-2005, 09:12 PM	#5
Wolfy Confirmed User Industry Role: Join Date: Dec 2003 Location: Wisconsin Posts: 3,574	I'm lost on this, I haven't studied it at all. If one were to invest money in this - where does it get invested? The Renminbi?

04-22-2005, 06:12 AM	#7
DarkJedi No Refunds Issued. Industry Role: Join Date: Feb 2001 Location: GFY Posts: 28,300	If the US doesn't weaken the dollar against the Chinese, their cheapness will eventually drive everyone in America out of business, as it will be impossible to compete with their prices. If the US does weaken the dollar against the Chinese, suddenly everything imported (eg., just about everything) gets more expensive, inflation shoots up, and then interest rates go up, fucking everyone with debt. Either way, US = fucked.

04-22-2005, 06:16 AM	#8
AdPatron No commissions, no fees. Industry Role: Join Date: Apr 2003 Location: USA Posts: 17,706	I don't care about the dollar.

04-22-2005, 06:16 AM	#9
ezrydn Confirmed User Join Date: Aug 2004 Location: Guadalajara, MX Posts: 695	Mexico won't allow Chinese stuff into the country. As for the "falling dollar," I could care less. My money stays in the US and I use my debit card down here to withdraw Mexican pesos. Right now, the exchange rate between pesos and dollars is 11.69:1. This money fluctuation shit is allowing me to live like a king. New car, New 2-story, 3-bdrm, 3-bath w/jacuzzi home and a new Harley. Keep it up world. Works for me.