Yes, the fed controls the dollar. and the Chinese control the Yuan. (yawn)
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Biggest bubble of all time
- Thread starter Kicking
- Start date
The Yuan has appreciated approximately 8% vs. the dollar this year. Your arguments are flawed.
Quote from tradestrong:
Unless the biggest fucking coincidence is happening in the world and the Yuan just happens to be falling naturally with the Dollar and the Chinese government isn't needing to direct its fall?
Quote from Tracy McGreedy:
The Yuan has appreciated approximately 8% vs. the dollar this year. Your arguments are flawed.
Look...you're missing my point. On a day to day basis, the Chinese government is controlling directly what range it will allow the Yuan to move in.
The Fed does set monetary policies to *influence* where the dollar goes. The Fed does not attempt to minute by minute control the dollar.
If by some crazy possibility, the dollar were to appreciate or depreciate 25% in one day, it would move fairly freely without much influence from the Fed. The Fed is more concerned with longer term trends.
The Chinese govt on the other hand will not allow its currency to move beyond what its allowable range is. If the currency is appreciating or depreciating beyond the "tolerable" range, then they will directly and quickly step in to control the movement of the currency.
So what was your original point in this anyways?
Chart of different currencies against the dollar. Notice the serene smoothness of the yuan line (usdcny=x is the symbol here).
<a href="http://finance.yahoo.com/q/bc?t=1y&s=USDCNY%3DX&l=on&z=m&q=l&c=usdeur%3Dx%2Cusdcad%3Dx" target=";"> Currencies against the dollar</a>
Chart of the yuan and the dollar against the euro. Notice the fact that, suddenly, the yuan's movements look more jerky, but correlate very closely with the dollar in terms of direction if not in terms of degree, whereas the CAD line looks completely different from both of these, which tells you that despite their disingenuous claim to be managing the yuan against a basket of currencies, the PBOC is really managing it against the dollar and only the dollar. Notice as well that the yuan has, over time, depreciated against the euro:
Currencies against the euro
Thus, both the yuan and the dollar have depreciated against the euro. Anyone who thinks the yuan would have depreciated against the euro in a free market is not living on this planet. It's obviously a side effect of its being managed against the dollar.
<a href="http://finance.yahoo.com/q/bc?t=1y&s=USDCNY%3DX&l=on&z=m&q=l&c=usdeur%3Dx%2Cusdcad%3Dx" target=";"> Currencies against the dollar</a>
Chart of the yuan and the dollar against the euro. Notice the fact that, suddenly, the yuan's movements look more jerky, but correlate very closely with the dollar in terms of direction if not in terms of degree, whereas the CAD line looks completely different from both of these, which tells you that despite their disingenuous claim to be managing the yuan against a basket of currencies, the PBOC is really managing it against the dollar and only the dollar. Notice as well that the yuan has, over time, depreciated against the euro:
Currencies against the euro
Thus, both the yuan and the dollar have depreciated against the euro. Anyone who thinks the yuan would have depreciated against the euro in a free market is not living on this planet. It's obviously a side effect of its being managed against the dollar.
how many of you genius youngster's remember in the early 90's the smart words coming from the real genius economist's that we could never have a bubble in real estate like japan had . no just bigger . how many months ago was it that there is just so much global liquidity out there. do you know what happens when you think you're too smart ?
bgp
bgp
Since when does the fed not step in to directly control money supply and value? That's their job. The market doesn't decide fed policy. The FED DOES.
I know what your point is, I'm just correcting them along the way. You're right about 180 now from where you began.
I know what your point is, I'm just correcting them along the way. You're right about 180 now from where you began.
Quote from tradestrong:
Look...you're missing my point. On a day to day basis, the Chinese government is controlling directly what range it will allow the Yuan to move in.
The Fed does set monetary policies to *influence* where the dollar goes. The Fed does not attempt to minute by minute control the dollar.
If by some crazy possibility, the dollar were to appreciate or depreciate 25% in one day, it would move fairly freely without much influence from the Fed. The Fed is more concerned with longer term trends.
The Chinese govt on the other hand will not allow its currency to move beyond what its allowable range is. If the currency is appreciating or depreciating beyond the "tolerable" range, then they will directly and quickly step in to control the movement of the currency.
So what was your original point in this anyways?
Quote from Tracy McGreedy:
Since when does the fed not step in to directly control money supply and value? That's their job. The market doesn't decide fed policy. The FED DOES.
I know what your point is, I'm just correcting them along the way. You're right about 180 now from where you began.
My very first post on this:
"There's a huge difference between how the dollar is manipulaed through fed policies vs. the Chinese goverment basically being the only player on the block in terms of influencing the currency exchange rates. The dollar floats and therefore, is probably valued where it should be. The Yuan is fixed. If the Chinese government decided to let it float, I gaurantee it wouldn't end up the day anywhere near its current levels."
The only thing I admit to being "technically" wrong on was that the Yuan is not "fixed" and is more of a pseudo-float. But for all intents and purposes, it might as well be fixed in that it is basically pegged for the most part to the dollar.
I haven't "180'd" on anything. Traders don't trade the Yuan because there is basically no profit, thus, as I said, the Chinese government is basically the only player on the block.
The dollar is freely traded on the open market with no government restrictions on the movement of the currency. The fed sets monetary policies to *influence* where the dollar goes. The Fed DOES NOT trade the dollar on a minute by minute basis as the Chinese government does.
If the Fed did trade the dollar on a minute by minute basis, the dollar would be manipulated in an identical manner as the Yuan and traders and speculators would not trade the dollar. Therefore, the dollar would probably not be valued at what it's "true" value would be as defined by the open market.
The fed controls money supply EVERYDAY which directly controls value. Imagine if the market dictated money supply, the dollar would not be where it is now.
Both scenarios, China and US, there is a body which influences price, independent of a free market.
Mr. Greenspan once understood that a fiat money system represents nothing more than a sinister and evil form of hidden taxation. When the government can print money at will, it's morally identical to the counterfeiter who illegally prints currency. Fiat money polices especially hurt savers and those on fixed incomes, who find the value of their dollars steadily eroded by the Fed's printing presses.
We need to understand why a fiat system is so popular with economists, the business community, bankers, and government officials. One explanation is that a fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims, who are usually oblivious to the cause of their plight.
Another explanation is that it's human nature to seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires efficient work and innovation in a capitalist society. Productivity is improved and the standard of living goes up for everyone. But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be increased out of thin air.
Most Americans are oblivious to the entire issue of monetary policy. We all deal with the consequences of our fiat money system, however. Every dollar created dilutes the value of existing dollars in circulation. Those individuals who worked hard, paid their taxes, and saved some money for a rainy day are hit the hardest. Their dollars depreciate in value while earning interest that is kept artificially low by the Federal Reserve easy-credit policy. The poor and those dependent on fixed incomes can't keep up with the rising cost of living.
We do hear some minor criticism directed toward the Federal Reserve, but the validity of the fiat system is never challenged. Both political parties want the Fed to print more money, either to support social spending or military adventurism. Politicians want the printing presses to run faster and create more credit, so that the economy will be healed like magic â or so they believe.
Who says the dollar isn't manipulated?
Both scenarios, China and US, there is a body which influences price, independent of a free market.
Mr. Greenspan once understood that a fiat money system represents nothing more than a sinister and evil form of hidden taxation. When the government can print money at will, it's morally identical to the counterfeiter who illegally prints currency. Fiat money polices especially hurt savers and those on fixed incomes, who find the value of their dollars steadily eroded by the Fed's printing presses.
We need to understand why a fiat system is so popular with economists, the business community, bankers, and government officials. One explanation is that a fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims, who are usually oblivious to the cause of their plight.
Another explanation is that it's human nature to seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires efficient work and innovation in a capitalist society. Productivity is improved and the standard of living goes up for everyone. But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be increased out of thin air.
Most Americans are oblivious to the entire issue of monetary policy. We all deal with the consequences of our fiat money system, however. Every dollar created dilutes the value of existing dollars in circulation. Those individuals who worked hard, paid their taxes, and saved some money for a rainy day are hit the hardest. Their dollars depreciate in value while earning interest that is kept artificially low by the Federal Reserve easy-credit policy. The poor and those dependent on fixed incomes can't keep up with the rising cost of living.
We do hear some minor criticism directed toward the Federal Reserve, but the validity of the fiat system is never challenged. Both political parties want the Fed to print more money, either to support social spending or military adventurism. Politicians want the printing presses to run faster and create more credit, so that the economy will be healed like magic â or so they believe.
Who says the dollar isn't manipulated?
Quote from tradestrong:
The Fed DOES NOT trade the dollar on a minute by minute basis as the Chinese government does.
If the Fed did trade the dollar on a minute by minute basis, the dollar would be manipulated in an identical manner as the Yuan and traders and speculators would not trade the dollar. Therefore, the dollar would probably not be valued at what it's "true" value would be as defined by the open market.