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Author Topic: It Looks It Is War! China Controlling Fed Exchange Rate Policy  (Read 204 times)

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Online andrewfi

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It Looks It Is War! China Controlling Fed Exchange Rate Policy
« on: October 11, 2015, 03:42:00 PM »
I know I have mentioned this before: the mechanisms by which the dollar is being controlled and reduced in importance.

Well, tonight I read an interesting piece that added something significant to my knowledge. To read the article CLICK HERE!

I had surmised that the small devaluation in August was a necessary part of China's long term planning - including the 'de-dollarisation' of global trade. What I did not know was that a few months ago one of China's top military strategists General Qiao Liang of the Peoples Liberation Army gave a speech making clear China's policy. According to him China's external relationships are pursued through financial, not military means.

The article goes into detail about mechanisms and timeline and is worth a few minutes of your time to read.

Having read it a thought went through my head about:
Quote
China's external relationships are pursued through financial, not military means.

As some may be aware the U.S having gone a little quiet on Syria and Ukraine is now ramping up invective about China and the Spratlys. Senior folks with names and ranks are talking about sending a flotilla to go sailing around and up close to (within China's 12 mile limit) one or more of the islands which China has been developing.

China has made it very clear that such action will not pass unmarked.

I am sure that China does not want any kind of a shooting war with the U.S, although right now there's folks in White Houses in Washington who are probably ready to see some guns firing under a U.S flag.

One wonders if an incursion around the Spratlys might be marked with some form of financial retaliation?
Dumping a load of treasuries again and another 2 or 3% devaluation?
Both have advantages for China anyway. China can afford to devalue probably another 17% or so but the small changes act as signals and thus have an effect out of proportion to their size..

"For what else is the life of man but a kind of play in which men in various costumes perform until the director motions them offstage?" -Erasmus