Monday, December 12, 2011

What are the chances of the USD increasing on the RMB?

in 2002 the USD was 8.2 on the Chinese RMB. Now it's down to 6.8 on the RMB... What are the chances of the USD increasing over the next 8 years? Or will it continue to decrease in value?|||Im no prophet but my best guess is that USD will continue to decrease over the next couple of years.





This is because the Chinese are holding lots (and lots lots lots) of US treasuries.....which the main drive to the strength of the USD for the past many Years before this financial crisis. And recently the Chinese had no choice but to sell off their USD dominated Treasuries in order to pump more money into their economy. Especially when the US Treasuries are sooo high right now.....they might take up the opportunity to sell their Treasury holdings.





Also with the coming president obama, promising to extend more bailouts and protectionism, is gonna drive the dollar to the floor. remember, China pumps their economy with money they made of by selling US treasuries (readily available assets)......but the US doesnt have anything to sell anymore to raise capital, so, they print more and more money (to bail-out wall street) which devalues USD even further.

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