China revalues Yuan

[el freako]

China has scrapped the peg of the Yuan to the Dollar - it is now linking it to a basket of currencies.

This has effectively meant a revaluation of the Yuan, although it is slight at the moment (around a 2% gain) it is possible that that will increase.

Full story at the BBC

[DRoseDARs]

But what effect will this have on the accuracy of SATs and ACTs in determining one's IQ?

[BeBMan]

Is this good or bad?

[DRoseDARs]

Your worth as a Human Being depends on it as compared to the value of a 1500+ SAT score in 1977...

[el freako]

Originally posted by BeBro
Is this good or bad?

Well, in the short term bad as prices will likely rise for chinese goods that the west imports.
In the medium term probably good as China has a more realistic currency.

Although it also has the possibility of being very bad if it leads to a wholesale end to China's support for the dollar (which will mean that America will either have to learn to live within it's means, or significantly raise interest rates)

[el freako]

Originally posted by DRoseDARs
Your worth as a Human Being depends on it as compared to the value of a 1500+ SAT score in 1977...

Are you posting in the right thread?

[Mr. President]

You will still get your Charisma modifier applied to price checks at selected outlets. The baseline will just be a different value.

[LDiCesare]

That's rather good news but the Yuan was about 20% underevaluated, so a rise of 2% is not much. They will have to let it be exchanged at its real value (so it'd be around 6.5 a $) if they expect the US (and Europe, though the EU is not exactly good at negotiating with other countries) not to use tariffs or other retorsion means against their excessively cheap money.

[Bosh]

Good, hopefully this will slow the Won's annoying tendency to rise against the dollar recently...

[:) Smiley]

Originally posted by el freako
Well, in the short term bad as prices will likely rise for chinese goods that the west imports.
In the medium term probably good as China has a more realistic currency.

Although it also has the possibility of being very bad if it leads to a wholesale end to China's support for the dollar (which will mean that America will either have to learn to live within it's means, or significantly raise interest rates)

The yuan would have to multiply in value several times before consumers would notice a change in prices - only a small fraction olf the sales price of a Chinese import is the manufacturing cost, the bulk is retail markup, taxes, and transportation.

Medium term, this would bring a boost to US manufacturing. Not only will domestic companies be in a better position to compete, but China will also be able to afford to import more US products.

[Ted Striker]

I Wonder if it wil continue to rise. Yuan can only speculate.

[Last Conformist]

Seems to me this is too small to matter much other than as a symbolic gesture.

[DanS]

This is good news in the long term.

[el freako]

Originally posted by LDiCesare
That's rather good news but the Yuan was about 20% underevaluated

Was it?
Most reports I saw (that had any basis in economic theory that is) suggested figures of 7% to 11%

[OzzyKP]

Originally posted by Ted Striker
I Wonder if it wil continue to rise. Yuan can only speculate.