Comments on: Son of Why the World Is Not About to End http://www.urbanagora.com/2008/09/son-of-why-the-world-is-not-about-to-end.html An exchange of ideas from thinkers spanning the spectrum Wed, 18 Jan 2012 21:26:43 -0800 http://wordpress.org/?v=2.8.2 hourly 1 By: David Täht http://www.urbanagora.com/2008/09/son-of-why-the-world-is-not-about-to-end.html/comment-page-1#comment-8315 David Täht Wed, 01 Oct 2008 16:27:00 +0000 http://www.bridgeportstudios.com/urbanagora/2008/09/son-of-why-the-world-is-not-about-to-end.html#comment-8315 I realize that you have lived through more history than I, but I am carrying around a lot more doom and gloom than you and documenting why on <a HREF="http://the-edge.blogspot.com/search/label/banking" REL="nofollow">my blog</a>.<br/><br/><a HREF="http://seekingalpha.com/article/97999-there-s-a-price-to-pay-for-not-going-it-alone" REL="nofollow">China can break the US if they so chose right now</a>:<br/><br/><i>Yu Yongding, a former advisor to the Chinese central bank, recently acknowledged the pressures on China and on the US by stating that Asia needs a deal to prevent panic selling of U.S. debt. However, China wants something in return:<br/><br/> Yu said China is helping the U.S. ``in a very big way'' and added that it should get something in return. The U.S. should avoid labeling it an unfair trader and a currency manipulator and not politicize other issues, he said.<br/><br/> ``It is not fair that we are doing this in good faith and are prepared to bear serious consequences and you are still labeling China this and that, accusing China of this and that,'' he said. ``China knows what to do. We don't need your intervention.''<br/><br/>He also indicated that this may be a tectonic shift in China’s future policies:<br/><br/><b> ``Our export-growth strategy has run its natural course,'' he said. ``We should change course.''</b><br/><br/> China should stop intervening in the foreign currency markets and thus allow rapid appreciation of the yuan, he said. While this would cause pain for exporters, China could ease the transition by using its strong fiscal position to aid those who lose their jobs. It also should stimulate domestic demand to offset lower income from overseas sales.<br/><br/> Without yuan appreciation, China will continue to accumulate foreign reserves, which means further accumulating ``IOUs from the U.S.,'' said Yu. ``This is paper and it may default and it will not increase China's national welfare.''</i> I realize that you have lived through more history than I, but I am carrying around a lot more doom and gloom than you and documenting why on my blog.

China can break the US if they so chose right now:

Yu Yongding, a former advisor to the Chinese central bank, recently acknowledged the pressures on China and on the US by stating that Asia needs a deal to prevent panic selling of U.S. debt. However, China wants something in return:

Yu said China is helping the U.S. “in a very big way” and added that it should get something in return. The U.S. should avoid labeling it an unfair trader and a currency manipulator and not politicize other issues, he said.

“It is not fair that we are doing this in good faith and are prepared to bear serious consequences and you are still labeling China this and that, accusing China of this and that,” he said. “China knows what to do. We don’t need your intervention.”

He also indicated that this may be a tectonic shift in China’s future policies:

“Our export-growth strategy has run its natural course,” he said. “We should change course.”

China should stop intervening in the foreign currency markets and thus allow rapid appreciation of the yuan, he said. While this would cause pain for exporters, China could ease the transition by using its strong fiscal position to aid those who lose their jobs. It also should stimulate domestic demand to offset lower income from overseas sales.

Without yuan appreciation, China will continue to accumulate foreign reserves, which means further accumulating “IOUs from the U.S.,” said Yu. “This is paper and it may default and it will not increase China’s national welfare.”

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