Home Forums Hunting & Shooting Hunter's Campfire China allows the Yuan to depreciate

If Trump really wants to F with them he needs to spend billions buying Brazilian , Argentinian , and Australian soy and grain. Tie up the rest of the worlds supply and force the humiliation of China by forcing them to buy the only available food. Products of the USA.

I've been pondering about the phrase "China is devaluing the Renminbi".

When you look closely at the current exchange rates, what you see is that the "in-China" rates are 6.92, but the OUTSIDE China rates are all the way down to 7.07 or even more.

What does that mean?

One, to me, it indicates this is not something that China may be doing deliberately. Fixing exchange rates takes enormous amounts of foreign currency. Once the traders figure out the equilibrium price is lower than the fixed price, they start trading the other direction, on the chance that the governments can't keep up. Fortunes used to be made this way. Can the Chinese government carry that kind of currency pressure? I doubt it. No government has ever been able to.

Second, the lower rate of exchange outside of China indicates there is a very large amount of Renminbi flowing "escaping" China. As in, anyone with money is trying to get it out of China as fast as they can. For years, anyone with money in China has been trying to get it out of the country. Once currencies start devaluing, that pressure greatly, GREATLY increases.

In my estimation, China had to let go of its exchange rate because the pressure got too high, and China is losing copious amounts of capital in a full on capital flight. That can throw a stick in the spokes of any economy.....

We might be short some toys and have to wait a week or two to get the latest Iphone. Not the same level of problems.

This is literally the last card they can play.

China can stop buying U.S. debt, also.

China is probably willing to stick it to their people more than our politicians are willing to stick it to us. The rest of the world will be buying China's goods while we are in a trade war. I do think moving manufacturing to other places with cheap labor is going to happen, but that takes time.

I don't see how China would lose the US supply chain, it's just going to cost more for their goods in this country. I don't see services like supply chain being affected by that. Maybe something I don't fully understand.

Still, China holds out till Trump is out and this all ends.

We buy most of our own debt. As of May China owned $1.1 trillion of the $4.1 trillion owned by foreign governments. Our government owns the other $18 trillion in US debt.

There’s plenty of market for discounted US Treasury bills and nothing would scream desperation and defeat like selling off T-Bills at a discount. We’re the worlds reserve currency and there’s no alternative. Just ask the Iranians , Russians , and everyone else we’ve sanctioned.

There’s a lot of places to build cheap chit cheap. The Chinese made it very easy to buy from them and subsidized the entry into markets. Now , with access becoming more costly with tariffs and more politically unstable companies will make the effort to invest in production elsewhere. As momentum builds in this direction it will not be possible for the Chinese to turn it around. Vietnam is already exploding with new manufacturing. Mexico has a new agreement and will be more enticing as a manufacturing location vs a pass through. Brazil will benefit. Once this really gets going it won’t matter if Trump is still in the Whitehouse. I’m all for cranking up this trade war another couple of notches. Let’s jack the tariffs up to 50% and start sanctioning the CCP leadership for human rights abuses. I’ll enjoy watching the Chinese run around screaming with their hair on fire. They really have no leverage at all. We don’t need them at all in the long run. One of our biggest allies, Japan, will begin to grow again with all the banking fleeing Hong Kong for a safe place to work from. Singapore will be another big winner at Chinese expense. The Chinese are nothing but thieving thugs and they’re about to get what they deserve.