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he Chinese leadership is afraid their currency will fall and increase "capital flight."
Chia is no longer focused on an export-led economy so a stronger currency would benefit them by reducing inflation, giving their currency greater purchasing power internationally, and limiting capital flight.
If the Chinese leadership though that the currency would rise relatively to the USD they would cut the cord.
Instead they are increasing interest rates to reduce capital flight, which is the same reason that central banks increased interest rates under fixed rate, gold convertibility to reduce the demand for gold in exchange of currency.
The reason that they should pull the plug is that "capital flight" is a chimera that is completely different from a draw down of gold under a gold standard.
6 comments:
Welp.... looks like they’ll have to be. going down to 2 rations of dog brain soup per day from the current 3.....
“Float that sucker.“
Their currency would go up... which is the wrong way for any USD zombie nation.... they’re never going to do it...
he Chinese leadership is afraid their currency will fall and increase "capital flight."
Chia is no longer focused on an export-led economy so a stronger currency would benefit them by reducing inflation, giving their currency greater purchasing power internationally, and limiting capital flight.
If the Chinese leadership though that the currency would rise relatively to the USD they would cut the cord.
Instead they are increasing interest rates to reduce capital flight, which is the same reason that central banks increased interest rates under fixed rate, gold convertibility to reduce the demand for gold in exchange of currency.
The reason that they should pull the plug is that "capital flight" is a chimera that is completely different from a draw down of gold under a gold standard.
The only flight they are concerned about is a flight of USDs out of their accounts....
Those USD are in the PBOC account at the Fed. There are no USD in circulation in China unless someone brought in some suitcases of cash.
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