Global recession coming?

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cassowary
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Re: Global recession coming?

Post by cassowary » Mon Aug 26, 2019 6:26 pm

neverfail wrote:
Mon Aug 26, 2019 3:44 pm
Doc wrote:
Mon Aug 26, 2019 12:48 pm
Milo wrote:
Mon Aug 26, 2019 12:00 pm
Doc wrote:
Sun Aug 25, 2019 9:07 pm

The value of the dollar is deflating internationally. That is what is hurting US manufacturing. It is also the point where the Fed should cut interest rates. But as per usual the Fed never saw an economic problem it was able to fix.
Typically a decline in currency value helps manufacturing.
Deflating = a rise in value. The Chinese are devaluing the yuan to offset the tariffs on their good in the US. Plus investors are, as usual in times of uncertainty, buying dollars. Also the EU is cutting interest rates All of which are driving up the value of the dollar. Though Gold is going up faster. Gold isn't an investment but it is kind of an insurance policy. For example it fiat currency collapsed one once of gold could be worth say $18,000 up in dollars or higher in other currencies.
So there you are! A strengthening US dollar is good news only for those sectors of US industry where imported components form a sizable cost input and where their market is wholly or predominantly the US domestic one. For other types of US production; both for import competing industries along with those struggling to remain cost-competitive in external markets a strong dollar is nothing but a bane.

In summary: even without a devalued PRC Yuan a stronger US dollar by itself would be enough to exacerbate the trend that make importing from abroad more profitable than producing the same goods at home.

The PRC Yuan? Even if that were a fully freely floating currency like the dollar, by now the global 4x market would have pushed the value of this currency down anyhow. So please stop griping about the "devaluation" of the Yuan Doc. Trump defined this as a "trade war'" and in warfare both sides will use whatever weapons they have at hand to win. The US has higher tariffs and the PRC has devaluation as weapons of choice. China is merely prosecuting its own best interests.
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
The Imp :D

neverfail
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Re: Global recession coming?

Post by neverfail » Mon Aug 26, 2019 9:29 pm

cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.

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cassowary
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Re: Global recession coming?

Post by cassowary » Tue Aug 27, 2019 4:19 am

neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
The Imp :D

neverfail
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Re: Global recession coming?

Post by neverfail » Tue Aug 27, 2019 5:40 am

cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?

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Sertorio
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Re: Global recession coming?

Post by Sertorio » Tue Aug 27, 2019 5:44 am

neverfail wrote:
Tue Aug 27, 2019 5:40 am
cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?
Cass doesn't care about people, he cares about the victory of his rotten ideology...

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Doc
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Re: Global recession coming?

Post by Doc » Tue Aug 27, 2019 11:38 am

Sertorio wrote:
Tue Aug 27, 2019 5:44 am
neverfail wrote:
Tue Aug 27, 2019 5:40 am
cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?
Cass doesn't care about people, he cares about the victory of his rotten ideology...
SO how many people do you suppose would die if your "good hearted" CCP decided to crack down on Hong Kong?
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

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Sertorio
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Re: Global recession coming?

Post by Sertorio » Tue Aug 27, 2019 11:45 am

Doc wrote:
Tue Aug 27, 2019 11:38 am
Sertorio wrote:
Tue Aug 27, 2019 5:44 am
neverfail wrote:
Tue Aug 27, 2019 5:40 am
cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?
Cass doesn't care about people, he cares about the victory of his rotten ideology...
SO how many people do you suppose would die if your "good hearted" CCP decided to crack down on Hong Kong?
I hope the CCP is smart enough not to crack down on Hong Kong. Socialism can live with diversity and Hong Kong's diversity does not endanger the CCP, as the rest of China is at least many decades away of feeling what the people of Hong Kong now feel.

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Doc
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Re: Global recession coming?

Post by Doc » Tue Aug 27, 2019 12:14 pm

Sertorio wrote:
Tue Aug 27, 2019 11:45 am
Doc wrote:
Tue Aug 27, 2019 11:38 am
Sertorio wrote:
Tue Aug 27, 2019 5:44 am
neverfail wrote:
Tue Aug 27, 2019 5:40 am
cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm


A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?
Cass doesn't care about people, he cares about the victory of his rotten ideology...
SO how many people do you suppose would die if your "good hearted" CCP decided to crack down on Hong Kong?
I hope the CCP is smart enough not to crack down on Hong Kong. Socialism can live with diversity and Hong Kong's diversity does not endanger the CCP, as the rest of China is at least many decades away of feeling what the people of Hong Kong now feel.
Where are the anti-democratic protests in the mainland of China? In the past the CCP has used such protests to twist the arms of foreign companies to do things the CCP way. There have been none. As bannon points out there have been anti-Hong Kong protest in many counties around the world. But none in the mainland. Could it be that the CCP is suddenly fearful of protests of any kind at home, that might just be used against the CCP?
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

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cassowary
Posts: 3206
Joined: Thu Dec 15, 2016 11:30 pm

Re: Global recession coming?

Post by cassowary » Tue Aug 27, 2019 5:11 pm

neverfail wrote:
Tue Aug 27, 2019 5:40 am
cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?
Why would millions die? Did millions die in 2008 when we had the GFC in 2008?
The Imp :D

neverfail
Posts: 3974
Joined: Sun Dec 18, 2016 3:47 am
Location: Singapore

Re: Global recession coming?

Post by neverfail » Tue Aug 27, 2019 6:51 pm

cassowary wrote:
Tue Aug 27, 2019 5:11 pm
neverfail wrote:
Tue Aug 27, 2019 5:40 am
cassowary wrote:
Tue Aug 27, 2019 4:19 am
neverfail wrote:
Mon Aug 26, 2019 9:29 pm
cassowary wrote:
Mon Aug 26, 2019 6:26 pm
This Yuan devaluation strategy has its disadvantage too - capital flight. Why invest in China if it’s currency is going to devalue?
A very valid question, Cass.

The time to get your money out of China would be BEFORE the anticipated devaluation when you could get more US dollars (or of any other freely exchangeable currency) for your Yuan. If you fail to do so then tough luck!

After devaluation can be a different story. As long as the punters are convinced there will not be further devaluation anytime soon it then becomes a buyers' market for anyone looking to snap up cheapened Chinese assets.

If Beijing goes in for repeat devaluations of their Yuan in response to Trumps serial tariff increases then it will destroy investor's confidence to the point where no one will want to invest. With the PRC banks allegedly burdened with non-sustainable debts it is likely to topple the PRC over into a full blown fiscal/banking crisis with unpredictable but unpleasant consequences.
That is probably what Xi is afraid of. China has an opague financial system with shadow banking. I don't understand how it all works. If there is a financial crash, the CCP is in trouble. It will lose its legitimacy. the only legitimacy the CCP has is that it is able to improve the living standards of the people. It has never known a recession in the past 30 years and so a recession will come to a shock to the Chinese people.

I won't be unhappy to see this happen if it sweeps away the CCP.
But think about of the millions, probably even tens of millions, of deaths that will accompany such an event. Would you wish such a fate on your ancestral homeland Cass?
Why would millions die? Did millions die in 2008 when we had the GFC in 2008?
I am not talking about the recession but the sweeping away of the CCP that you forecast shall come about in its wake. If you believe that that will be accomplished peacefully, without undue struggle and stress, then you must be very ignorant of China's long and sorry history of regime change violence.

This being China they do it, like they do so much else, on a massive scale when it happens.

As the saying goes: sometimes the cure is worse than the disease.

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