Comments on: A Far-East Fiasco? http://ContrarianEdge.com/2008/12/26/a-far-east-fiasco/ Vitaliy Katsenelson blog on the economy, stock market, and stocks. Applying Active Value Investing approach. Fri, 18 May 2012 08:51:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Bond newbie http://ContrarianEdge.com/2008/12/26/a-far-east-fiasco/comment-page-1/#comment-183082 Bond newbie Sun, 04 Jan 2009 07:12:53 +0000 http://ContrarianEdge.com/2008/12/26/a-far-east-fiasco/#comment-183082 Vitaliy: While not a China scholar, I believe China cuts by 27 bps because 7 is a lucky number, and 5 is unlucky -- associated with death. Also, if you think we are in a L-T govt bond bubble that will burst soon, you should have stuffed your stocking with Homer & Sylla's History of Interest Rates. Yes, we're near 138-year lows, but in the 30s and 40s, we STAYED THERE for over a decade. Lastly, the Chinese can't create or destroy U.S. dollars -- only Congress, executed by the Treasury. Fed only gets to choose if it's as a Federal Reserve Note or a security. Every dollar the Chinese sell needs to find a buyer. Alternatively, a dollar the Chinese DON'T BUY is a dollar not spent on Chinese goods being exported. The Chinese govt will not risk civil unrest by revaluing the remnimbi and making their factories less globally competitive. Vitaliy: While not a China scholar, I believe China cuts by 27 bps because 7 is a lucky number, and 5 is unlucky — associated with death.

Also, if you think we are in a L-T govt bond bubble that will burst soon, you should have stuffed your stocking with Homer & Sylla’s History of Interest Rates. Yes, we’re near 138-year lows, but in the 30s and 40s, we STAYED THERE for over a decade.

Lastly, the Chinese can’t create or destroy U.S. dollars — only Congress, executed by the Treasury. Fed only gets to choose if it’s as a Federal Reserve Note or a security. Every dollar the Chinese sell needs to find a buyer. Alternatively, a dollar the Chinese DON’T BUY is a dollar not spent on Chinese goods being exported. The Chinese govt will not risk civil unrest by revaluing the remnimbi and making their factories less globally competitive.

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