Chinese Yuan Offshore

Stockolio

Stockolio

https://www.marketwatch.com/investing/currency/usdcnh

Currently about to hit 6.93, was at 6.71 April 16th a month ago... With already very high levels of Inflation in China, this moves indicates Monetary leader's in China place exports above Consumption GDP and Inflation. If it hits 7, will their be a massive sell-off ? Yuan devaluation has sparked sell-offs in the past, they are out of US Dollars and need to do absolutely anything to get them, devaluing is survival and makes sense at this point... Expect even higher Inflation and outcries from population, increased capital flight although it's already happening at a fast pace.

Does it ever hit more then 7 and what are the logical consequences/reaction in world markets if it does ?
 
7 is prolly more psychological than anything. Capital flight has been going on and control has been getting tight.

Real exchange rate prolly close to 20 if free flow is allowed.
 
dozu888 said:
Real exchange rate prolly close to 20 if free flow is allowed.
More...

How did you get 20? If it hit 20, it would be a chaos in China. Gold and bitcoin will shoot through the roof. The peoples of China wouldn't be able to afford foods. Political instability would happen. It would be a total disaster!

If it got to 20, it might as well go to 100+.
 
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Pension_Admin said:
How did you get 20? If it hit 20, it would be a chaos in China. Gold and bitcoin will shoot through the roof. The peoples of China wouldn't be able to afford foods. Political instability would happen. It would be a total disaster!

If it got to 20, it might as well go to 100+.
More...

true - 20 is a collapse... but they have printed too much and almost all the money has gone to real estate... the 4 biggest cities have RE value more than the entire USA lol... so if you do a quick calculation on a napkin, you get about 20
 
the chinese people are the most hard working and the most enduring in the world, bar none... you think Americans are hardworking... multiply that by 150-200% you will be close to how hard the Chinese people work.

this is not to talk down the American workers.... when you have 1.5b people and only so many opportunities concentrated on a few east coast cities, you can imagine the competition.... the recent 'ing' thing is the so called 996 - work week from 9a to 9p, 6 days a week, across all professions... imagine if you push that in America.

Because of the massive printing... it's almost impossible for young people from outside the major cities to take foot hold, impossible to afford a place to call permanent home... even people who were born in the major metros... either they are lucky enough to inherit a condo or 2 from parents/grannies, or they have to buy, which means exhausting life savings of the grandparents, their parents, then take on a mortgage they have to pay for the rest of their working life... this is robbery in broad day light, massive wealth transfer from the average citizen to the elites..

But, there is no revolt, no revolution... the average people just put their heads down and work and work and work.

This is why the normal capitalism formulas don't apply to China.. you'd think this kind of debt bubble spells certain disaster... but with 1.5b hardworking people, you never know.

so on the PPP basis China is slightly higher than the US... and if by napkin calculation the 4 major cities worth about 25% of all the real estate in China, then the exchange rate should be 4X the current value.. so 20-30 give or take... or course this is an extremely simplified napkin calculation.
 
Due to the huge population and the intense competiton, there are also lot of Chinese people trying to get ahead through the means of corruptions. It will render any government intervention useless when sheets hit the fan.

I am not sure if they have burned and destroyed all the history books during the Cultural Revolution, but I hope they start reading their own Chinese history, particularly during the Hyperinflationary period back in the 1940s. It did not end well for the Chinese Nationalist Party.
 
In addition, the flaw of a country run by a dictator is that he will have a whole bunch of useless yes-men working for him. Sadly, they have to be the yes-men or else they wouldn't survive. The dictator will make a lot of mistakes that he might not even be aware of due to these yes-men. These yes-men would cover up all the mistake while getting rich from it.

China is done.
 
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