81–90 of 118 posts
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Yeah, and given the results of the past decade I'm inclined to trust the Communists... Not that they're actually communists; they're just a really big national corporation, imho.
Indeed, more like a well-runned corporation with 1.3 billion workers.
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Not without also trashing it for those in China using it as a store of value, and not without the cost of price instability being imposed upon anyone selling/buying goods with the currency during the process.
You can if every thing they want to buy is made in your country. The US can't half the value of the dollar to boost exports because everything in Walmart that is made in China will double in price. China can because everything it's people want to buy in GreatWall-Mart is already made in china. As long as the government steps in to subsidize imported fuel the people wouldn't notice as long as they didn't travel - and…
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I'm not inclined to trust the communists more than the Fed, but I am inclined not to put all my eggs into one basket.
The above discussion makes little sense. By maintaining USD peg China has no independent monetary policy - it's monetary policy is directly influenced by Federal Reserve.
Much like the tech bubble and housing bubble, by the time you read these articles in the mainstream press, it is FAR too late to invest. You've already missed 10-15 years of explosive growth in the Chinese economy.
Simply not true. Laughably so. Listen to yourself. You're telling people not to invest because they'll only do well out of it rather than doing very well out of it. People were saying the same thing about gold two years ago and one year ago.
Your argument would make just as much sense without these words, and leaving them out would help keep HN a place for civil discussion.
tl;dr version It's very unlikely to go down. It's very likely to go up. You won't miss out on a lot of interest elsewhere, as nowhere else is paying a lot of interest. It will diversify your portfolio. And, finally, it may offer you and your family something of a hedge against the decline of the U.S. economy.
Ah yes, the holy trail of investments. This one, we swear, won't go down! Really, look at all the reasons. Just like housing. It's not like their banks have billions of yuan in loans to companies or government investment vehicles which large numbers of economists question the viability if.
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Indeed, more like a well-runned corporation with 1.3 billion workers.
Well run? You've obviously never been to China.
It's not a floating currency, it's directly controlled by politicians. Holding yaun is taking a speculative currency bet on the competency of the Chinese Communist Party to successfully manage the Chinese economy.
Ditto for the dollar. You're taking a bet on the Federal Reserve's competency in regulating the US economy.
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The above discussion makes little sense. By maintaining USD peg China has no independent monetary policy - it's monetary policy is directly influenced by Federal Reserve.
China, not the Fed, has ultimate control over their monetary policy. They can always change their monetary policy and probably will have to. Which is what the discussion is in fact about, if you read the original article.
sure, but since 1994 they haven't really exercised that ultimate control:
http://en.wikipedia.org/wiki/File:1_RMB_to_US_dollar.svg
and despite all promises to the contrary last year, they are still not exercising it to any substantial extent:
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Simply not true. Laughably so. Listen to yourself. You're telling people not to invest because they'll only do well out of it rather than doing very well out of it. People were saying the same thing about gold two years ago and one year ago.
The problem with that sort of thinking is that it relies on you being able to time when when market will go from being irrational in one direction to being irrational in another. Lets take the dot-com boom as an example. There were people saying that dot-com companies were overvalued in 1997, when the Asian currency crisis hit. Those people were, in retrospect, probably right. However, the next two years made them lo…
The original argument was that there was no point in investing, because if you'd invested 10-15 years ago, you'd have made a lot of money. That argument is wrong for obvious reasons, which I will spell out anyway; just because something did well in the past is no reason to think you'll lose money on it in the future.
Your argument is that if you invest in something and it goes down in value, you lose money. That's true but not relevant.
Eli's point seems to be that it's possible to make money on an investment after it's had an explosive growth stage; the obvious truth in counter to the initial falsehood, and in no way addressed by your comment.
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China, not the Fed, has ultimate control over their monetary policy. They can always change their monetary policy and probably will have to. Which is what the discussion is in fact about, if you read the original article.
China, not the Fed, has ultimate control over their monetary policy. sure, but since 1994 they haven't really exercised that ultimate control: http://en.wikipedia.org/wiki/File:1_RMB_to_US_dollar.svg and despite all promises to the contrary last year, they are still not exercising it to any substantial extent: http://www.google.com/finance?q=NYSE:CYB
If they fail to maintain the peg, the RMB will most likely rise. Most US consumers are already exposed to the downside of this risk - they have expenses which will rise if the RMB goes up (e.g., all the goods they purchase which are made in China).
Holding RMB is a hedge against this.
