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codswallop Donating Member (97 posts) Send PM | Profile | Ignore Fri Jan-28-05 11:08 AM
Original message
Economist - China Loses Faith In Dollar
Economist - China Loses Faith In Dollar

By Edith M. Lederer
Associated Press Writer
1-27-5


DAVOS, Switzerland (AP) -- China has lost faith in the stability of the U.S. dollar and its first priority is to broaden the exchange rate for its currency from the dollar to a more flexible basket of currencies, a top Chinese economist said Wednesday at the World Economic Forum.

At a standing-room only session focusing on the world's fastest-growing economy, Fan Gang, director of the National Economic Research Institute at the China Reform Foundation, said the issue for China isn't whether to devalue the yuan but "to limit it from the U.S. dollar."

But he stressed that the Chinese government is under no pressure to revalue its currency.

China's exchange rate policies restrict the value of the yuan to a narrow band around 8.28 yuan, pegged to $1. Critics argue that the yuan is undervalued, making China's exports cheaper overseas and giving its manufacturers an unfair advantage. Beijing has been under pressure from its trading partners, especially the United States, to relax controls on its currency.

"The U.S. dollar is no longer -- in our opinion is no longer -- (seen) as a stable currency, and is devaluating all the time, and that's putting troubles all the time," Fan said, speaking in English.

http://www.washingtonpost.com/wp-dyn/articles/A39107-20...
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Nite Owl Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-28-05 11:14 AM
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1. Saw that story I think it was on
Wednesday. I thought it was really big news and expected a lot of talk about it. Seems that this is not being discussed in the msm as far I can tell.
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codswallop Donating Member (97 posts) Send PM | Profile | Ignore Fri Jan-28-05 11:26 AM
Response to Reply #1
2. Yeah, I dredged it up after Will Pitt posted his new piece.
It bears repeating, and will soon impact us like the Will Pitt 'China Syndrome' metaphor.

An economic tsunami is headed our way.



Remember those less fortunate

---

http://sludgereport2.blogspot.com/
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dandrhesse Donating Member (500 posts) Send PM | Profile | Ignore Fri Jan-28-05 11:28 AM
Response to Reply #1
3. This is a huge story that should be front page news but many folks
don't understand the importance of the statement. I just read the other day that China outpaced us last month as the nation that imported the most goods from Japan. That is so significant. The only thing at this point that we have to offer the world is our consumerism. Except, Bush and his policies have created a monster debt and guess who one of our huge bankers is, that's right China.

So, let's see, China says our dollar isn't worth as much, we have a trade deficit with China, China and Russia are building alliances, and China owns a significant portion of our debt which puts us in a position to demand what? That's right, nothing.
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codswallop Donating Member (97 posts) Send PM | Profile | Ignore Sat Jan-29-05 07:20 PM
Response to Reply #3
5. It soon will be
when the consequences kick in.
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Vitruvius Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-29-05 12:34 PM
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4. The US standard of living will eventually collapse along with the dollar.
Edited on Sat Jan-29-05 12:34 PM by Vitruvius
And this article well merits a :kick: -- for it's an early warning of what lies in store for all of us.
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LibertyorDeath Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-05 07:48 PM
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6. *
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