19-11-2004 10:34									#61
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quote: Damn, what a collective inferiority complex this nation has.

Not really, it just makes good economic sense. Especially considering Canada is the US's Walmart.

	19-11-2004 10:52									#62
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quote: Originally posted by Wezil Alright, I'm convinced. It would be much better for our dollar to be dropping. How low shall we aim my fellow countrymen? 60 cents? Hell, let's dream BIG and go for 40.... I understand rapid change can be very disruptive, which is why our collective governments need to get off their arses and make the fundamental taxation/spending changes that need to be made so our industry can compete w/o a 20%+ exchange cushion. Damn, what a collective inferiority complex this nation has.

Actually, you're a prime example of Canadian inferiority.

If the Canadian dollar was worth 60 cents American, you would see the Canadian dollar as weak when it might not be.

The Hong Kong dollar is worth 13 cents American. Does that mean the HK dollar is weak? No. Does it mean that HK has massive taxes? No. Does it mean HK people are poorer than Americans? No.

It just means a different measuring unit is used for prices.

Canadians need to get over the stupid idea that the Canadian dollar should be on par with the US dollar.

	19-11-2004 11:10									#63
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To be fair parity makes life easier for everyone living near the border who who does business across the border.

	19-11-2004 11:18									#64
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quote: Originally posted by Oerdin To be fair parity makes life easier for everyone living near the border who who does business across the border.

Not the people who make a living off people coming to one side or another for better deals.

Parity would only make sense if wages and the cost of living were the same on both sides of the border. Which they're not.

	19-11-2004 11:38									#65
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quote: Originally posted by Oerdin To be fair parity makes life easier for everyone living near the border who who does business across the border.

It would be an insignificant difference.

	19-11-2004 14:20									#66
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hey tingkai, why did china buy 20b USD yesterday if they set their rate by printing more and not by buying USD?

	19-11-2004 14:25									#67
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quote: Originally posted by Tingkai It would be an insignificant difference.

It does make conparission shopping easier for people on the border.

	19-11-2004 14:27									#68
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LOA: It would be more correct to say that China sold US$20 billion worth of RMB.

Edit: In other words, people want to buy more RMB than those who want to sell it so China is left with a surplus of US$20 billion.

Do you have a link that says China went out and bought US$20 billion independently of demand.

	19-11-2004 14:28									#69
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quote: Originally posted by Lawrence of Arabia hey tingkai, why did china buy 20b USD yesterday if they set their rate by printing more and not by buying USD?

The fall of the dollar only disturbs the export secter of their economy which is important but not as large as the domestic market. Printing more currency would case large scale inflation for the entire domestic market thus making hundreds of millions of Chinese unhappy.

Besides China has such a price advantage that even with these relatively small adjustments they'll still be WAY cheaper.

	19-11-2004 14:29									#70
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who did chna sell it to?

	19-11-2004 14:34									#71
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Sell what? RMB?

The sale of RMB depends on the amount.

An individual can go to a Chinese bank and purchase relative small amounts over the counter.

An exporter/importer needs documentation show that goods were sold before the money is converted, although these days it's fairly easy to make these conversions.

An investor requires different types of documentation with more rubber stamps before the money can be converted.

	19-11-2004 14:35									#72
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They traded their fake second currency for dollars is what they did. China needs to get rid of the RMB and just stick with Yuan.

Last edited by Oerdin on 19-11-2004 at 14:44

	19-11-2004 14:36									#73
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quote: Sell what? RMB?

yep

	19-11-2004 14:37									#74
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see my edit post.

Better yet, what's your point.

	19-11-2004 14:39									#75
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quote: Originally posted by Oerdin They tradeed their fake second currency for dollars is what they did. China needs to get rid of the RMB and just stick with Yuan.

They have. RMB to the Yuan is like the dollar to the buck.

	19-11-2004 14:40									#76
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quote: In other words, people want to buy more RMB than those who want to sell it so China is left with a surplus of US$20 billion.

but if more people want to buy then sell, then you have a shortage, not a surplus. my point is im trying to figure this out.

	19-11-2004 14:40									#77
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quote: Originally posted by Oerdin They tradeed their fake second currency for dollars is what they did. China needs to get rid of the RMB and just stick with Yuan.

Uh, the Yuan is the same as RMB.

	19-11-2004 14:40									#78
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quote: Originally posted by Oerdin It does make conparission shopping easier for people on the border.

Which I think is minor, particularly compared to the problems of pegging one currency to another.

Didn't we have this conversation before?

And what happened to Neo?

	19-11-2004 14:45									#79
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When did they do that? So the RMB is totally gone and now just the Yuan remains?

	19-11-2004 14:46									#80
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I don't believe we have had this conversation before. Maybe you were speaking to someone else.

I got bored of Neo and the first 8 avatars I tried were all to large so I finally settled on this one. It's a stop gap measure until something better comes along.

	19-11-2004 15:00									#81
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quote: Originally posted by Lawrence of Arabia but if more people want to buy then sell, then you have a shortage, not a surplus. my point is im trying to figure this out.

For simplicity sake, let's say 1 rmb = 1 us.

Start with US companies wanting to buy 1 billion rmb of Chinese goods. The companies go to a Chinese bank, trade US$ for RMB, buy the chinese goods and ship it to the US.

So now the bank has US$1 billion and the chinese companies have 1 billion rmb.

The Chinese companies want to buy American goods so they go to the Chinese bank and trade in the RMB for US$. Note that there is simultaneous trade where the individual Chinese bank take the US$ and trades it to the China central bank for RMB.

If there is a trade balance then the Chinese companies are trade in their 1 billion rmb and get US$1 billion. We're back to where we started.

But let's say the Chinese companies only want to buy US$800 million of US goods (A trade deficit for the US, a trade surplus for China). In this case, the bank is left with US$200 million in its vault while the Chinese companies have 200 million RMB.

That extra 200 million RMB will get spent in China while the US$200 million ends up in foreign reserves.

What China does is essentially force individual banks to buy government bonds which essentially sucks excess rmb out of the economy.

	19-11-2004 15:02									#82
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quote: Originally posted by Oerdin When did they do that? So the RMB is totally gone and now just the Yuan remains?

I think it happened back in 1993.

Before that time there were two currencies, one for the domestic market and one for international trades.

	19-11-2004 15:11									#83
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ok i get it now, thanks

	19-11-2004 15:18									#84
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quote: Originally posted by Tingkai Before that time there were two currencies, one for the domestic market and one for international trades.

No. There has always been one currency, which is the RMB. That's the name, just like USD. A standard unit of the RMB is called the Yuan, just like the Pound is the standard unit of the UK currency.

As for what you said, there was a period of time where foreign exchange was strictly limited. You cannot exchange RMB directly for any foreign currencies, you must buy something called a "Foreign Exchange Bill," which has the same unit as the RMB, but was strictly regulated and can be used to buy foreign currencies.

	19-11-2004 15:27									#85
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The "foreign exchange bill" looked like money, right?

I seem to remember there were two currencies when I went into China back in 82. Tourists could only get one type of currency and it could only be spent in "friendship stores" hotels and tourist places. But maybe I'm thinking of something different.

	19-11-2004 15:34									#86
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I remeber to the early 1990's when alot of the business magazines were reporting the Chinese Yuan was noconvertable (at least officially) and they didn't want to make it float as then the government couldn't keep the Yuan artificially low thus a second currency was introduced which would only be used by banks. This second one was called the Renumbi and the Yuan could only be converted into Renumbi and then Renumbis sold for dollars, Yen, or what not.

	19-11-2004 20:34									#87
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Simply put, you can't just buy some rmb to speculate with, at least not on an exchange.

	19-11-2004 20:40									#88
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quote: Originally posted by Kidicious Simply put, you can't just buy some rmb to speculate with, at least not on an exchange.

edit: you can't buy or sell them

	19-11-2004 23:38									#89
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quote: Originally posted by JimmyCracksCorn Parity would only make sense if wages and the cost of living were the same on both sides of the border. Which they're not.

Agreed, and I continue to contend excessive taxation/spending policies by successive governments (don't worry, I blame Mulroney as well) have led to this situation.

What did we do the last time our dollar was consistently on par with that of the US? Did the legions of unemployed sit on their thumbs and wait for the pogey cheques to arrive? Actually, no. The unemployment rate was consistently a good percentage point below today's level. Who would have thunk it?

The Canadian economy is far more complex than just T-shirt makers in the suburbs of Montreal. Some industries actually benefit from a higher dollar.

	19-11-2004 23:43									#90
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quote: Originally posted by JimmyCracksCorn I don't get why some Canadians seem to like this idea. Canada is an exporter country! More precisely, Canada is a "exporter to the US" country. A high loonie no good.

I am an importer. My company imports Car parts from the U.S. mostly.

So that should explain the ''YAY!''.

Spec.