-- On 23 Mar 2005 at 20:19, Anonymous wrote:
If the yuan is actually cheaper than it should be because of being pegged to the dollar, there's a much easier way to take advantage of the arbitrage opportunity: simply buy goods in China and sell them in America. And guess what, thousands of Chinese export companies do just that, making money off the economic downhill slide that China has erected spanning the Pacific. This effectively forces Chinese workers to be paid less than they are worth, decreasing their savings and acting as an economic stimulus for China as a whole.
Your economics is entirely sound, but I disagree with you on one minor question of fact. I doubt the yuan is cheaper than it should be. Seems to me that the fundamental reason why chinese are working cheap and providing us with their excellent goods in exchange for our rather dubious and shaky dollars so abundantly printed by the Bush administration, is that the chinese banking system is even more dubious and shaky. Chinese prefer to stash their wealth in America, rather than in China. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG yC4wWPvE9H0XZCRKPMW6PqvlRX3vgMVfysKz8u6u 44OJ9qSkTtN7rlOcXnJVAQ7CsuzdGN9MlipEX1/yY