Ufo propu engine, closed loop

[ltseung888]

Do I really understand the present foreign exchange rules?


(1) Many Nations adopt a floating rate policy. Some use managed float (pegged to the US Dollar but allow some up or down movement).
(2) It is the responsibility of the Central Bank of a Nation to "defend" the Exchange rate.
(3) Take the case of the Chinese Currency - RMB. If someone sells RMB, Bank of China must buy it if there were no other buyers. Otherwise, the exchange rate will go lower.
(4) If the Hedge Funds get together and all sell RMB, Bank of China will have to use the Foreign Currency Reserve to buy and thus slowly deplete the Reserve.
(5) If the Foreign Currency Reserve is depleted, China will have no option but to allow the RMB to float and devalue. (Under present rules).
(6) If the Hedge Funds can borrow or obtain RMB at low cost, they can keep selling RMB and deplete the Chinese Foreign Currency Reserve.
(7) The Hedge Funds can spread the rumour that RMB is about to devalue and cause many RMB holders - Chinese Citizens, Companies or Trading Partners etc. - to exchange their RMB for USD. There will be many sellers. Bank of China may become the only buyer.
(8) If Bank of China does not buy, the exchange rate will fall, there will be more panic to sell the RMB for USD to preserve the wealth.
(9) The Hedge Funds can claim that it is "Market Forces" at work. They can always blame the collapse of the RMB (and the inevitable instability and loss of confidence in the Chinese Government) on Chinese corruption, massive debt, over expansion and inevitable failure of Communism).


Am I correct?

China can directly or indirectly spread the rumor that RMB will appreciate as an agreement with Trump. China will raise the exchange rate so that Chinese Goods will be more expensive - giving USA and others a chance to compete.

[ltseung888]

http://orientaldaily.on.cc/cnt/finance/20170125/00273_001.html

The above Chinese Newspaper Article described the attack of the RMB by the Hedge Funds. It said that the Hedge Funds used "news" to spread gloom for China. The Foreign Exchange Reserve plummeted from 4 trillion to 3 trillion with no sign of stopping.

人民幣貶值趨勢既成，引發內地走資潮，人行不惜動用外匯儲備去減慢貶值速度，力圖挽回市場信心，可惜堆沙填海，治標不治本。去年十二月，中國外儲跌至三萬億美元邊緣，創近六年新低，較高位縮水近萬億美元。

中央穩信心效果不彰，反而因外儲消耗，惹來金融大鱷群起攻擊，並唱淡中國外匯儲備會跌至二萬六千億美元，隨時觸及警戒線。大鱷屢發這些言論，實際上是要借助市場力量，聚眾推牆，測試底線為名，向市場發放悲觀預期為實，推冧人民幣，從中獲利。

[ltseung888]

http://orientaldaily.on.cc/cnt/finance/20170125/00273_001.html

The above Chinese Newspaper Article described the attack of the RMB by the Hedge Funds. It said that the Hedge Funds used "news" to spread gloom for China. The Foreign Exchange Reserve plummeted from 4 trillion to 3 trillion with no sign of stopping.

人民幣貶值趨勢既成，引發內地走資潮，人行不惜動用外匯儲備去減慢貶值速度，力圖挽回市場信心，可惜堆沙填海，治標不治本。去年十二月，中國外儲跌至三萬億美元邊緣，創近六年新低，較高位縮水近萬億美元。

中央穩信心效果不彰，反而因外儲消耗，惹來金融大鱷群起攻擊，並唱淡中國外匯儲備會跌至二萬六千億美元，隨時觸及警戒線。大鱷屢發這些言論，實際上是要借助市場力量，聚眾推牆，測試底線為名，向市場發放悲觀預期為實，推冧人民幣，從中獲利。

When daily newspapers carry such article, the currency war is clear. The Hedge Funds are using the well-tried strategy of spreading rumors that the RMB will depreciate. The Foreign Currency Research of China is going to dwindle and get more people "to push down the wall".


We have outlined a possible solution here. I hope that it will be passed to the decision makers.

[ltseung888]

https://www.youtube.com/watch?v=WM0jQ8QN-rw


A Chinese expert voiced his opinion. He suggested the currency war was a major cause of the USSR collapse.

[ltseung888]

http://orientaldaily.on.cc/cnt/finance/20170125/00273_001.html

The above Chinese Newspaper Article described the attack of the RMB by the Hedge Funds. It said that the Hedge Funds used "news" to spread gloom for China. The Foreign Exchange Reserve plummeted from 4 trillion to 3 trillion with no sign of stopping.

人民幣貶值趨勢既成，引發內地走資潮，人行不惜動用外匯儲備去減慢貶值速度，力圖挽回市場信心，可惜堆沙填海，治標不治本。去年十二月，中國外儲跌至三萬億美元邊緣，創近六年新低，較高位縮水近萬億美元。

中央穩信心效果不彰，反而因外儲消耗，惹來金融大鱷群起攻擊，並唱淡中國外匯儲備會跌至二萬六千億美元，隨時觸及警戒線。大鱷屢發這些言論，實際上是要借助市場力量，聚眾推牆，測試底線為名，向市場發放悲觀預期為實，推冧人民幣，從中獲利。

A discussion session
Some of us discussed the above at a dinner party over a few drinks. The following are some juicy extracts.
Tseung: "What would you do with your RMB account?"
Person A: "Change them to USD. The general consensus is that the RMB will depreciate."
Person B: "That is unpatriotic. You are helping the Hedge Funds to drain the Chinese Currency Reserve."
Person A: "I am a small guy. I just want to preserve my wealth."
Person C: "I do not hold any RMB but I go to Shenzhen often for entertainment. If RMB devalues, I shall use my Hong Kong Dollars to exchange for more RMB and enjoy myself more."
Tseung: "Have you ever considered what would happen if the Hedge Funds succeeded in draining the Foreign Currency Reserve of China?"
Person A: "I am a small guy. I do not worry about such big, complicated things."
Person B: "Do you remember the Asian Financial Crisis in 1997? Did that affect you?"
Person C: "I was stupid and sold most of my stocks and property at the low price to change into dollars. I lost a fortune at that time. I hate Hedge Funds. Those Hedge Fund Managers are crocodiles. Someone should skin them."
Person D: "China has a lot of Foreign Currency Reserve. Don't worry."
Person B: "Read the newspaper article carefully. The Reserve has dwindled from 4 trillion to 3 trillion USD."
Tseung: "What do you think about the proposal of using the Malaysian technique?"
Person C: "My import and export business relies on stable exchange rate. If the RMB is firmly pegged to the Dollar, I am happy."
Tseung: "What about the plans to make RMB a Reserve Currency?"
Person C: "I do not care. I just want currency stability so that I can predict my risks in my business."