Heh heh...again.
What was the rate of exchange RMB/USD before QE2?
What is the rate today?
A different question -- what happens to the PRC economy if the Dollar falls sharply in relation to the RMB?
I hear Americans talking so stupidly about China. If you really look at it -- 2 trillion dollars in currency reserves &
almost 1.5 billion people? Those reserves aren't going to take it very far with that kind of population.
I'm not the only one who thinks China is an economic paper tiger.
I could be wrong about that. But I do know, inflation is higher in the PRC than it is in the US.
And I also know that inflation there means starvation. There are a lot of people alive in the PRC
who have experienced periods like that.
I know. I'm a heretic around here on this subject. Tough. I've been there. I've seen it with my own two eyes.
And I know how utterly stupid many Americans are when it comes to understanding the place.
Roubini: "CHINA (2011)
The RGE report rules out the chances of China allowing a considerable devaluation of the yuan and says the tension with the U.S. over currency will remain in focus.
It says the hangover from the country's fiscal and monetary stimulus is beginning to set in, and that inflation will rise and growth slow.
"Fighting inflation will be the primary goal of monetary policy for at least the first half of 2011, though we do not expect an excessively restrictive lending quota for the banking sector."
http://hken.ibtimes.com/articles/92404/20101215/nouriel-roubini-global-economy-prediction-forecast-outlook-2011-us-china-japan-eurozone-india-brazil.htmI don't care much for most of Krugman's views. But on the PRC -- unfortunately, he's right.
“China has an unloaded water pistol pointed at our heads.†Actually, it’s even better: China can, if it chooses, throw some cold water on us — but it’s a hot day, and we would actually enjoy it."
Krugman - China's Water PistolBut the questions I asked at the beginning will put people on the path to wisdom about the economy of the PRC.
The problem is -- too many Americans are too stupid & too insular to grasp what's really happening over there.
All you have to do is walk around & keep your eyes open. You'll see big problems opening up right before your eyes.
There is something called the "Rotten Tail". That's what the locals call it in English.
The "Rotten Tail" refers to large abandoned construction projects. You see them in big Chinese cities.
Why are they abandoned? Because the developers got huge, sweet-heart loans from the government. Often these developers
are Party members. Often, they have a family relationship with the lenders.
So they took the money & then they just went home. They stopped paying people. Investors who bought into the projects lost everything.
In the US, these people would get arrested. In the PRC, they get away with it. And you see these "rotten tail" projects all over the place.
They're not as numerous as 7/11's or Pizza Huts over there. But you see them a lot.
Yeah maybe I know nothing about economics. But I know a phony when I see one. And the PRC is full of them.