An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Monday, December 11, 2017
Zero Hedge — China Unveils Plan To Combat Trump Tax Reform: “We’ll Have Tough Battles"
China needs a quick injection of MMT. Follow Russia's lead and float that sucker.
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.
Welp.... looks like they’ll have to be. going down to 2 rations of dog brain soup per day from the current 3.....
ReplyDelete“Float that sucker.“
ReplyDeleteTheir 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."
ReplyDeleteChia 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.
ReplyDeleteThe only flight they are concerned about is a flight of USDs out of their accounts....
ReplyDeleteThose 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.
ReplyDelete