Job Discussion Forums

[mdovell]

Not to get into a deep political or economic argument but here's a few obvious basic things

1) if an unpegging does occur it would have to be gradual. We're talking about major currencies and economic trade between countries...

2) other commodities are at play....oil is priced in dollars...some labor leaders in the USA suggest that it is undervalued by 40% (which I think is wrong but for the sake of argument lets use it) ok so what happens as the yuan rises 40% against the dollar?....oil declines 40% in price in china (I know there's government price controls but they'd have to drop it...otherwise it would be considered a tax)

3) the real store is the yuan vs the euro
http://tinyurl.com/26b3xek

rates are nearly at 7 year lows..one euro to 9.1 yuan when it used to be 11 europe is 20% of chinas market...

The trade deficit with the USA has been shrinking
http://www.census.gov/foreign-trade/balance/c5700.html#2010
so it's hard to revalue the yuan if exports keep declining. Stimulus domestically to spur domestic consumption is key until they gradually unpeg