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China Gets It From All Sides, As Jim Rogers And The NYT Call For Yuan Revaluation

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littlekracker


China Gets It From All Sides, As Jim Rogers And The NYT Call For Yuan Revaluation

Joe Weisenthal | Aug. 16, 2010, 7:41 AM

Jim Rogers 728Last week's larger-than-expected US trade deficit will prove to be the catalyst to spur the next round of calls further yuan appreciation.

The trade deficit spurs an editorial in today's NYT titled Return Of The Killer Trade Deficit, which doesn't call for any protectionist measures, but rather a recognition on the part of Chinese leaders of the need to "rebalance" their economy.

Meanwhile, the biggest China bull of them al, Jim Rogers, recently gave an interview to the International Business Times, in which he pointed out the folly of the fixed yuan. First he noted that no economy has ever become "world class" with a blocked currency.

But beyond that, he argues:

I know they say in the press that if the currency goes up, China will suffer. That may be correct. I would point out though that the Japanese yen has gone up 400 percent over the past few decades and Japan still has a balance of trade surplus.

I would also point out that if the currency goes up in China, many people would benefit. They import all their cotton. They import oil. Everything they import would go down in price, so a lot of people would be better off!

They are worried about the people [like exporters] who might be worse off rather than the people who would be better off.

What seems obvious is that we're just getting the beginning of this talk, which is exactly what Ambrose Evans-Pritchard predicted this weekend.

Add to the mix all the talk about the soaring Yen (and the obvious desire among leaders in Japan to weaken it) and you have some interesting currency crosswinds to watch out for.



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