The Yuan – or Renminbi – is the national currency of China. Few understand its inner workings, as – like most Chinese financial data – transparency is limited; particularly regarding the currency; which has been “pegged” to the world’s major currencies for two decades…
The Forgotten Peg: Chinese Yuan and U.S. Dollar
Per the chart below, the Yuan/Dollar exchange rate was UNCHANGED from 1993-2005; and since then, has been allowed to gradually decline within a prescribed range dictated by a basket of global currencies – dominated by the U.S. dollar…
This “forgotten peg” is by far the most LETHAL weapon in the global CURRENCY WARS; as it has enabled China to acquire MASSIVE global manufacturing share…
…which is EXACTLY what Japan and the rest of the world’s CURRENCY WAR participants are targeting – at the expense of each other…
Could Abe’s Devaluation of Japanese Yen Spur a Currency War?
Yet, the Yuan peg gets little attention because China has become TPTC, or “Too Powerful to Challenge. From time to time, American politicians bluster about China de-pegging the Yuan; but mostly, such rhetoric simply targets votes from the uninformed public. The fact remains that China is the U.S.’s LARGEST CREDITOR…
…and without the cheap industrial production the peg enables, Americans would immediately experience MASSIVE price inflation…
With a drop in demand for the dollar, import prices will rise. As the US is now an import-dependent country, from that day on, Americans who walk into Walmart will think they have walked into Neiman Marcus.
To maintain the peg, the Bank of China does what all Central banks due amidst CURRENCY WARS; PRINT MONEY in unlimited quantities – just as the supposedly “conservative” Swiss National Bank has done since pegging the Franc to the Euro in September 2011…
In China’s case, it must print Yuan “unit for unit” with production of currencies from the aforementioned global “basket”…
…which care of “Worldwide QE to Infinity”; has recently gone parabolic – in the U.S.…
…Europe…
…and Japan – among others…
…so much so, China currently prints half the world’s currency to maintain the peg…
China Accounts for Nearly Half of the World’s New Money Supply
Per above, the Yuan peg has enabled China to become the undisputed KING of manufacturing. However, the other way China is DESTROYING AMERICA is by acquiring PHYSICAL gold – in its preparations to take over as the world’s top superpower…
China Eclipses U.S. as Biggest Trading Nation
The last time China publicly increased its “official” gold reserves was four years ago…
China reveals it has 1,054 tonnes of gold reserves – April 2009
…but other data proves it continues to buy gold at a breakneck pace…
China’s Gold Imports from Hong Kong Double to New Record In 2012
…both in the public sector…
…and via private citizens…
The Chinese will continue to trade their dollars – and the Yuan PRINTED to maintain the peg – until there is no more gold and other ITEMS OF REAL VALUE to purchase with depreciated fiat currencies. And when that occurs, it will be revealed to all “HOW CHINA DESTROYED AMERICA.”
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China did not destroy America. America destroyed itself from within. We only need to look at DC/NY, not China.
I agree completely. Don’t blame China, blame US citizens who have participated in the destruction of their country. Watching O’Bombers supporters, it’s quite evident that the vast majority of Americans have embraced this fascist empire. Time to pay the piper.
Sadly you are both correct. America did itself in and China provided the weapons of suicide. Sure sign that this time “the end REALLY is VERY near” – headlines scream that “Wal-Mart shoppers are gone!”. Well, they need money to shop but the government took it! Even those surviving on food stamps are using what they have for “other purposes” some legal like $4/gasoline as well as illegal stuff to ease the pain. Walmart stores are empty these days! Dollar General is growing. When will a “Penny a Pound” store chain launch? Soon, I expect. Total trash for worthless currency. Fair trade.
You are all correct. The question is how do we get the majority of our country away from drugs, alcohol, and Facebook long enough for them to make informed decisions? What if we just defaulted on our debt to China? Then we are basically done for. There are so many angles to this debate, at least we practice much more sound fiscal policy in the US than China ever has. I know, I know – another debate, but objectively speaking – and Fed intervention notwithstanding, this is still the best place on earth to live and you can not argue with that.
Bob, that is exactly right. When I read the title I hated it, Instead of looking within, America wants to make China the villan. The only way for our country to survive is to face the truth and stand up for what is right.