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Friday, August 14, 2015

Chinese Floating Fortress?

Interesting - reads like something out of Science Fiction. It's definitely thinking big - Which is very China!

Chinese launch floating fortress project - FT.com

When I do a Search on the term Chinese Floating Fortress, I get a lot of interesting images.


Wednesday, August 12, 2015

8 I Don't Knows - China's Devaluation

My last blog post was on my 10 Educated SWAG's, I mean Guesses on China's Devaluation.

Here is stuff I wonder about.

  1. What impact will the devaluation have on capital outflows from China? Will it increase it, or decrease it? What is causing the outflows?
  2. What will China's devaluation have on properties in the US?
  3. Will the devaluation cause inflation or deflation in China?
  4. Will the devaluation cause inflation or deflation in the US?
  5. What impact will China's devaluation have on the Chinese economy?
  6. How much further will China devalue their currency? Currently at 4.5%.
  7. Will China's devaluation lead to a currency crises, as happened in 1997?
  8. Will this devaluation hurt or help the Yuan becoming a reserve currency?

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10 Guesses on China's Devaluation

China's Devaluation - What will happen?

There is a lot of guessing out there on what will happen. Most are probably wrong.

My 10 Ten Educated Guesses:

  1. Currency War - with countries doing a race to the bottom. Vietnam, Japan, and others seem to be following China. China is calling the devaluation a "Convenient Reform" The first day was 2%, and currently it's 4.65, back to 2011 July levels. ZeroHedge is warning of a Current War. Vietnam devalued it's currency, as has Japan.
  2. China had tied their currency to the US Dollar, which had become too strong and this was hurting exports to areas with weaker currencies, such as the Euro zone.
  3. China will devalue their currency more.
  4. The US is not going to increase interest rates from basically Zero, or will only be doing a symbolic amount.
  5. China's leadership needs continued strong growth in China's economy, and they believe the only way is through exports.
  6. The Fed Reserve will probably start QE again. China seems to be selling US bonds. The US has little influence they are willing to use for influencing China. China wants the Yuan to become a reserve currency, so this may moderate the devaluation.
  7. China will probably emphasize even more of a buy China made goods campaign
  8. Luxury Goods for US & European sales to China will suffer.
  9. China's economy is worse than the official figures from China. The question is how much worse. The contract between the Chinese government and people, is growth will be high. In exchange, the Chinese people support the government. The historical term for this is Heaven's Mandate.
  10. China's gold reserves are higher than the official numbers.

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