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Posts Tagged ‘yuan’

The U.S. and the Dollar in numbers; how crazy, you decide

April 8th, 2010 8 comments

$1.4 trillion out of thin air

The U.S. government has created out of thin air (“manipulated” into existence if you prefer) $1.4 trillion since September 2008 (around the time of the financial crisis) to March 2010.  (Source: U.S. Fed.) In December 2008, James Grant wrote an article in the WSJ criticizing the Fed “printing like mad … and is the wrong approach with potentially dire consequences.”

What’s the point? Everyone who hold assets denominated in dollar are immediately going to have their wealth diluted in proportion to the amount “printed” (it’s computer based now, and so the physical printing is no longer necessary).  China and Japan are the two largest foreign holders of American debt,  so the value of their holdings decrease.  The vast majority of holders of dollar denominated assets are in fact Americans.  Their purchasing power is now reduced.  Who is “manipulating” who?

Read more…

Professor Jiang Ruiping:”Revaluation of Japanese Yen, a historical lesson to draw: analysis”

March 21st, 2010 No comments

Under U.S. pressure, the Japanese government revalued the Japanese Yen 200% from end of 1985 through early 1988 to address the trade deficit U.S. had with Japan. Did it make any difference for the U.S.? What happened to the Japanese economy as a result of that revaluation?

Professor Jiang Ruiping, Chairman of the Department of International Economics, at the Beijing-based Foreign Affairs College had an article in the People’s Daily in September 25, 2003, titled, “Revaluation of Japanese Yen, a historical lesson to draw: analysis.”  He addressed those questions for us back in 2003.  Below is the translation by People’s Daily Online staff member Li Heng:

(For a view of the whole Yuan and Dollar exchange rate issue, have a read at one of our featured posts, “Opinion:Making Sense of the Dollar and Yuan“.) Read more…

(Letter) How fast China can catch up the US in GDP? It may be faster than you think.

August 5th, 2008 50 comments

In 2002, the GDP of China was 10.2 trillion yuan, and the GDP of the US was 10.6 trillion US dollar. At the year-end exchange rate, China’s GDP was 11.7% of the US’. In 2007, the GDP of China was 24.7 trillion yuan, and the GDP of the US was 14.0 trillion US dollar. At the end-end exchange rate, China’s GDP was 24.0% of the US’.

If we assume the relative paces of the underlining economic numbers remain the same, China will catch up the US in 2019. That’s scenario #1. The key underlining economic numbers are: nominal GDP growth and currency exchange rate. Read more…