Replies to post #1111 on The Rising Influence of Rising Affluence

[DewDiligence]

That article is total Government Bullcrap. All that is happening is that the US Government has pressured the Chinese in to allowing our Government to inflate the hell out of our currently.

The underlying issue is whether the renminbi ought to be pegged to the US dollar. If there were no peg, normal market forces would by now have led in an appreciation of the renminbi (yuan) vs the dollar, and hence the local prices of US exports in China would be cheaper.

IF INTEL WANTED TO HAVE THE SAME EFFECT IT COULD LOWER ITS OWN PRICES.

That would not have the same effect. Lowering its dollar-denominated prices would lower INTC’s transactional profit margin; an appreciation of the renminbi would preserve INTC’s transactional profit margin and lower INTC’s profit after translation from yuan into dollars.