Fatal Appreciation
Author: May 03, 2011 12:02
|
Although the official keeps denying the possibility of one step RMB appreciation, the recent condition applies the impossibility is to be unavoidable. For the past two weeks, the middle rate of RMB against U.S. dollar increased in a row. Meanwhile, few key officials air the view that RMB will be just-for-once appreciated to fight against the inflation. Although it was personal point of view, it was sufficient to show the government has weakened its resistance attitude on appreciation, and has accumulated its positive feedback.
Appreciation fight against inflation? This voice seems very similar to that propaganda of an American named Geithner. But the difference is that Geithner has forecasted first and clearly know its consequences and the goal. While we can not know for sure whether the result will be as good as we assumed for the appreciation turning from passive to active situation is the only choice under such a situation press.
Historical experience proves that on international exchange rate fluctuation, a just-for-once sharp appreciation is just the end of the game. Americans always appreciate its currency to enlarge its asset bubble during the process of risk transferring and the one-time appreciation is merely its final price request for that country to maximum its profit. Their idea is that by sharp appreciation, stick to enlarge China asset bubble, thus make the way for its debts. Its intention is quite clear, yet we are tempted by their logical guide, believing appreciation can fight against inflation.
Now that the final appreciation signal has come out, investors should believe the era of irrational prosperous will be ended soon. The sharp appreciation of RMB is only a shield for the large scale debts. No matter what we see now; unbelievable results will be happened in a few months. Only take a look at what Sorrows are busy with, you will understand the truth. His Hong Kong office has been busy for over half a year. This guy is not to help you, he is well known as shorten the market by plundering booty at right times.
Hot money will soon flow back to America, which will be sooner than we expected. U.S. dollars will soon kick the bottom and rebound up as my article,《The Five Road Map of International Economy》, demonstrated at the beginning of the year, which clearly forecasted that U.S. dollars will kick the bottom at the end of the first season, even if it did not, it will kick by the beginning of the second season, which is the same time concept. After June, the most popular topic will be when the federal government raises interest rates? To the U.S. economy, even the worst employment data has the sign of turnaround while food price rising endow a heavier pressure to the federal government, for they can’t maintain the quantitative easy policy that has already lose people.
The final RMB appreciation may lead to the real estate market pick up, which sufficiently invalidate all the efforts of appreciation against inflation. However, the Bank of China had to continue implement its tight monetary policy for the pick in real estate, and the rising rate put a heavy burden on enterprises, and middle and small enterprises will suffer disaster from the sharp rate fluctuation.
RMB continual appreciation will cause a chain reaction. I hope market participants not puzzled before the scene that real estate pick up, capital asset stock rise up, bulk commodity price continue rise up. But all these will be end soon. Even if the commodity price does not hit the peak, I have the duty to remind the friends that read my Column all the way, what we have seen and what will happen is not the same matter. For most of the bulk commodity price, hit the peak means the end. It is sorry that I still not able to give out an analytic treatise on such a point of view. But for the past time, such a point is logical and continual. Now the only thing that can’t be certain is the increasing of gold price will up to $1600, which demonstrated in my 《Road Graph》and frankly speaking, I become unsure. Because the largest gold ETF fund SPDR lower the 100 tons of stock by making the price at $1,380. High price out sign is quite apparent. I can give 100 evidences of that to contend the point that the game will be over soon, but I don’t think it’s necessary, for this is only a usual strategic analyst article, we only exchange opinions.
|
Editor: Candy From: 168Tex.com
Most Read