What do you think the US to Euro exchange rate will be in 18 months

[Tupac Shakur]

Don't encourage him.

[Dinner]

If it had been shortened to that, then it would have been more or less correct, but would not have contained the implication that this was somehow wrong or unfair, which is presumably what you were really interested in expressing.

Please do illuminate what you mean by the statement that the chinese have somehow interfered in the "normal" working of supply and demand for the yuan...

http://en.wikipedia.org/wiki/Fixed_exchange_rate

There is a nice article on it though it would be more percise to say the Chinese allow the yuan to float in an extremely narrow band where as before months would go by with no change in the exchange rate as the central bank attempted to maintain a peg. Basically until 2005 the yuan had a fixed rate of exchange where as now the peg isn't exact and is allowed to move with in an extremely narrow band.

[DaShi]

It's like if you put all the money in the world into one basket. The Chinese make their money float to the top of the basket. People will then be grabbing more Chinese money out of the basket than any other currency. This will make them more likely to become addicted to Chinese coke rather than safe, effective American coke. Do you want your children snorting Chinese coke?

[giblets]

It's like if you put all the money in the world into one basket. The Chinese make their money float to the top of the basket. People will then be grabbing more Chinese money out of the basket than any other currency. This will make them more likely to become addicted to Chinese coke rather than safe, effective American coke. Do you want your children snorting Chinese coke?

No!

I still don't understand how China could be maintaining an "artificially low" exchange rate.

[Dinner]

http://www.bbc.co.uk/news/business-17721335

From two months ago. China will now allow the currency exchange rate to vary up to 1% from the central bank's set price. Prior to that the band was even more narrow +/-0.5% but now the band is +/-1% of the Chinese central bank's set price. This is not the free market at work. This was in response to US pressure. If the Chinese central bank stopped tampering with exchange rates I bet we'd see at least a 20% increase in yuan value over night; loads of news reports quote analysists claiming the yuan is up to 40% lower then where the exchange rate would be if it was allowed to float freely.

[Dinner]

http://www.reedconstructiondata.com/alex-carrick/post/how-does-china-keep-the-value-of-its-yuan-low/

Some interesting notes on the mechanics of how China's government can keep the yuan artificially low.

[giblets]

No country has "the free market at work" for its monetary system if adjusting the supply of its currency to maintain a policy target (whether its exchange rates or interest rates) is considered "the free market not being at work".

Both China and the US meddle with the supply of their currency in order to maintain full employment and stable prices. Is the US a "currency manipulator"? Think for a second, if an economy was at full employment and the central bank suddenly decided to slash the exchange rate by buying foreign currency through printing money, what would happen?

[C0ckney]

by the way, for those who want to follow the greek elections, here's the results coming in real time.

http://www.igraphics.gr/en/multimedia/2012/06/elections2012b