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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891 -
This thread should apply for the Most Tiresome Thread Award
Lets go :
My knowledge of your views comes from what you said in this thread, that is that a country can only benefit from having its currency freely exchanged on a market; as you are not discounting any occurrence when this could be wrong, and as you did not mention other aspects of your views, I could only conclude that your views are simplistic (which in my opinion is much more friendly than commie or socialistI don't know how you have adequate knowledge of my views to label them simplistic.
The actual experience was that, in the Asian meltdown, China was not contaminated. A market could have done the same, but it could also have been contaminated. Therefore, when comparing the absence of market system and the market system, the first has the advantage of having proven immune under actual circumstances (when all other markets were failing), whereas the second could have HYPOTHETICALLY performed as well.You seem to presume a failed Chinese currency market when making the comparison. Why?
Even an hypothesis must be supported; I have no supporting rational to provide. What I know, is that in a decision making process (should we right away change the pegged yuan for a freely tradable yuan), I would not decide such a move on the basis of unsupported hypothesis.It could have not taken part if it had a freely traded currency as well. Indeed, it might be that a freely traded Yuan would have stabilized the other Asian currency markets.
I assume that something of the sort could exist in the IMF papers because the IMF has never(?) expressed the though that China was badly wrong in the choice of the foreign exchange arrangement.Has anybody done a study on this?
You did not indicate that, it is my understanding of what faith applied to foreign exchange could be.Where did I indicate that faith in the markets means blindly believing that markets always reach equilibrium?
Previously you said :I seem to remember that the fundamental reasons worked themselves out in the meantime (if you have a clearer memory, then I would be interested in knowing how you remember it). Soros and his ilk were the instigators, but it's not as if they didn't recognize imbalances that they believed they could take advantage of.
This can be understood as if the devaluation was of no consequences, to what I answered that in this case,The pound is still traded on the currency markets despite the meltdown, of course, much to the UK's benefit.
I of course agree that there were imbalances which have to be recognized sooner and later, and Soros only decided it should be sooner.The fact that the pound recovered in the following years could only demonstrate that the speculation alone was able to bend the BoE, without fundamental reasons.Last edited by DAVOUT; December 8, 2003, 14:56.Statistical anomaly.
The only thing necessary for the triumph of evil is for good men to do nothing.Comment
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Let's try to wrap this up, because China's system is interesting to discuss in itself and the discussion shouldn't be obscured by semantics.
Where did I say that a country can only benefit from having its currency freely exchanged? I don't think that I even implied it. If China is to trade without bartering, it has to have some sort of currency exchange. A bad exchange is better than none at all. But a better exchange would be big additional benefit to China.My knowledge of your views comes from what you said in this thread, that is that a country can only benefit from having its currency freely exchanged on a market; as you are not discounting any occurrence when this could be wrong
Well, GP was busting your balls a little. But after this conversation, you still seem to dwell on the market failures rather than an even-handed analysis of the disadvantages and benefits of the market to a developing country.which in my opinion is much more friendly than commie or socialist
All part of the analysis of the relative merits of the hypothetical. But you haven't done this analysis, or at least haven't shared it with us. The hypothetical doesn't seem outrageous, after all. Is it?The actual experience was that, in the Asian meltdown, China was not contaminated. A market could have done the same, but it could also have been contaminated. Therefore, when comparing the absence of market system and the market system, the first has the advantage of having proven immune under actual circumstances (when all other markets were failing), whereas the second could have HYPOTHETICALLY performed as well.
That's not the way I meant it. I would say that the UK on balance is much better off with the devaluation and their current system versus no devaluation and a less free system.This can be understood as if the devaluation was of no consequences, to what I answered that in this case,I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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It's a little outrageous to me. Can you explain your thinking?Originally posted by DanS
The hypothetical doesn't seem outrageous, after all. Is it?I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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Here is the problem :
This is not true.If China is to trade without bartering, it has to have some sort of currency exchange. A bad exchange is better than none at all.
Summarily, China exports are billed in $. China receives $ in payments. With these $ China pays its imports and buy US bonds. There is no need of other exchanges of currencies. The yuan is not convertible, and cannot be used for international trade.
From the beginning, I tried to understand, and quite unsuccessfully to explain, why China decided in favour of the peg yuan, and still consider it to be adapted to their state of development. As the main differences between a convertible currency and an unconvertible one, is the absence of market, I necessarily focussed on this point. But you ceaselessly want to qualify the idea, and surprisingly their apparent author, rather than discuss their own merit, hence your insistence in seeing only one thing from which you derive political opinions.But after this conversation, you still seem to dwell on the market failures rather than an even-handed analysis of the disadvantages and benefits of the market to a developing country.
In this matter, I am motioned by pure intellectual interest toward a complex problem which will be the subject of multiple issues, commentaries, and international fights in the years to come, and we are exactly in the proper timing to try to be aware of it.
As a neutral observer, I do my best to modestly understand why China uses for the time being the peg yuan, but I am not able to tell the Chinese authorities that they are wrong or right. I realize that any change is a heavy decision and cannot be made on the basis of hypothesis, even if they can be said non outrageous.All part of the analysis of the relative merits of the hypothetical. But you haven't done this analysis, or at least haven't shared it with us. The hypothetical doesn't seem outrageous, after all. Is it?Statistical anomaly.
The only thing necessary for the triumph of evil is for good men to do nothing.Comment
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"Chinese Currency Manipulation": Testimony of Ernest H. Preeg, Ph.D., before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, May 1, 2002The Bank of China has made protracted large scale purchases of foreign exchange—$150 billion since 1995—in order to maintain a large trade surplus as an offset to poor growth performance in the domestic economy.
I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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Yes, you are correct. I mispoke. Let me think some.This is not true.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Having a nonconvertible currency doesn't prevent China from buying currency. It only means that the buyer has to spend the remnimbi on Chinese goods or invest in China.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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They can only buy currency with the goods that they export. The Yuan cannot be used to buy currency.Having a nonconvertible currency doesn't prevent China from buying currency.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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It can be it the Bank of China is the seller.Originally posted by DanS
The Yuan cannot be used to buy currency.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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On what market would they sell?I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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World Paper MoneyOriginally posted by DanS
On what market would they sell?I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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I don't know how to answer this question, but they do trade their currency for dollars.Originally posted by DanS
On what market would they sell?I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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DAVOUT: It appears to me that China's system is meant to be pay-as-you-go. Perhaps they wish to avoid a persistent overall trade deficit.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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