Re: Another China Currency Story

how many handguns have you made today, ***?
did you stuff them up your ***? if not, do it !!


On Aug 29, 1:28 pm, "sha zu Kang(butcher Kang) Fucks Chairman
Cat(Mao)" <dick_12345...@xxxxxxxxxxx> wrote:
PaPaPeng wrote:
On Sun, 26 Aug 2007 18:12:32 -0700, "sha zu Kang(butcher Kang) Fucks
Chairman Cat(Mao)" <dick_12345...@xxxxxxxxxxx> wrote:

PPP: The consumer market in China is very different from the West's.
Chinese prefer not to go into debt and will pay cash for their
purchases. Its a simple fact that if you don't have the money you
don't buy the fun stuff that drives Western economies. No giant flat
screen TV sets, no facy new car, designer clothes, the latest
electronic gizmos, etc.

PengPengPeng, What did you mean "prefer"?

PRC residents have no payment method except cash. There are no person
check, money order. They can have "credit" card. But they will be
sent to jail for 3 years if they fail to pay they owe.

That's exactly the kind of confirmation I like. I don't know anyone
in China well enough to ask about personal spending practices. I can
only observe and infer. The fact established here is in China if you
don't have the cash you don't spend. That's how I conduct my affairs
too.

The whites can't seem to get this simple principle.

In the US when the economy is slow and people are not buying fluff the
Federal Reserve Board adjusts their bank rate so that it is cheap to
borrow and spend on things that are in reality quite unecessary. In
addition to the list I gave earlier unecessary spending can include
holiday travel and expensive concert tickets. You can probably come
up with more examples. The banks are of course more than happy to
lend for the movement of money is where they earn their commissions
and profits.

Warnings of an impending crash had been given so often and disproved
as often that people no longer listen. There's always China a sucker
enough to keep buying US debt paper. But deep in our guts we know
this can't go on forever. That "forever" might be real this time
round. #We don't know yet.

The fundamental here is China's government cannot increase consumer
consumption even if she wanted to.

No, you are wrong again! If the bank sell foreign currency to the PRC
resident, most of them are willing to exchange all of their salary.

You probably are not that knowledgeable about how the Central Bank and
money supply work. Exchanging Yuan for USD does not increase the
money supply. Only increased spending increases the size of the
economy. We already agreed we cannot spend money we don't have. So
the money must come from loans or from increased production.

In PRC, the story will be totally different!

When people withdraw their saving to buy USD or other foreign or gold,
the banks have to consider their inactive debt(may more than 25%). If
the people bank does not want them to go to bankruptcy, she will print
more RMB yun bills.

the banks in PRC are owned by gov, People bank always give them money
without compensation. I remember that a few years ago, everyone of
the four banks obtain 50 billion USD from people bank.

HJT does not believe himself has the ability to control PRC. He will
do as few as possible.





New property is beyond the reach of most Chinese. Buying a car is
ridiculous unless you have a place to park it, a privilege already
very difficult for those who live in upscale multistorey apartments
that is the norm of people who can afford cars. And since most
ordinary apartments are barely 1000 sq feet in size there is no room
for fancy items like large screen TV sets or any of the consumer toys
so beloved of US consumers.

Thus the excess liquidity in China because there is nowhere to spend
one's savings. The banks pay miniscule returns. The small Shanghai
Stock Exchange (compared to NYSE, the LSE and other more mature stock
exchanges) cannot absorb the liquidity.

Can you ask the banks in PRC to sell gold to the resident? I knows
that a PRC resident will be sentenced to die if he/she own too many
gold.

Again converting Yuan into gold does not increase the size of the
economy. Nothing is consumed. Nothing is produced. But if the US
government agrees to sell their gold hoard in Fort Knox indeed China
can reduce its USD debt holdings by billions of dollars. This is
perhaps, exchange USD for gold bullion, the best response China can
give to the US Congressmen should they ever threaten a trade war with
China.

The US Congress wants the Chinese government to make loans cheaper and
more accessible to stimulate consunmption and therefore personal debt.
Then the Government will have to circulate more cash and draw down its
reserves. The explainations starts getting complicated. Its enough
to say that China's government cannot stimulate consumption this way
without also wreaking the fine non inflationary balance it is enjoying
now.

The current US economic meltdown is due to making loans to people who
had not in the first place the means to service their loan over its
full term. Buy cars they cannot afford, etc. Now the US politicians
want China to bail them out. Fat hope. If they impose trade
protection to restrict Chinese imports that's something China will
have to take in stride. A broke America will have reduced consumption
anyway. To concede to the US demands and upset the present stability
in pricing and cost of living conditions within China will have
unpredictable economic consequences, none of which are rosy, and may
well start a train of economic dominoes globally. The other demand is
for China to revalue its Yuan. The humongous trade imbalance in
China's favor will have to be evened out somehow. But this will have
to be a gradual process, in any case will not be fast enough to bail
out the US's financial crisis.

I told you GWB was using HJT's grand son as a remote controller to
control PRC. If GWB wants PRC to eat his ***, PRC will eat and ask
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