6 Reasons Stocks Will Rise From China's Yuan Move [View article]
I couldn’t help but laugh as I read the first bloggers’ comments about China’s decision to allow the yuan to be unpegged for the first time in two years. A fairly popular writer over at Seeking Alpha actually said that unpegging the yuan would be a nonevent in the short term! Some nonevent! ______________________...
Harvard's economics historian Niall ferguson has pretty much the same view with the added twist it could be a side show in advance of the G20 meeting and it would take a 20% revaluation to have big economic impact. In this environment I would not use the market to divine truth.
Bloomberg had a nice piece on today and the consensus is that over the long run it should lead to a more balanced global economy with China consuming more and the US consuming less. Chinese will have more purchasing power while we will have less.
The step is also seen a vote of confidence among Chinese leaders in their own economy and a wish to rebalance its components and to stem inflationary forces through increasing the purchasing power of the yuan. A more flexible exchange rate should reduce boom bust cycles and allow the Chinese to expand consumption while reducing reliance upon exports.
6 Reasons Stocks Will Rise From China's Yuan Move [View article]
______________________...
Harvard's economics historian Niall ferguson has pretty much the same view with the added twist it could be a side show in advance of the G20 meeting and it would take a 20% revaluation to have big economic impact. In this environment I would not use the market to divine truth.
Bloomberg had a nice piece on today and the consensus is that over the long run it should lead to a more balanced global economy with China consuming more and the US consuming less. Chinese will have more purchasing power while we will have less.
The step is also seen a vote of confidence among Chinese leaders in their own economy and a wish to rebalance its components and to stem inflationary forces through increasing the purchasing power of the yuan. A more flexible exchange rate should reduce boom bust cycles and allow the Chinese to expand consumption while reducing reliance upon exports.