Ufo propu engine, closed loop

[ltseung888]

Tseung, you did not mention the attack on the local stock markets to gain local currency and create panic first before the Currency Attack in the Asian Financial Crisis.


China fell into the trap or false pride of Reserve Currency. It voluntarily pumped much RMB into the International System. That means the Speculators have more ammunition. They do not need to attack the Chinese Stock Market to get hold of RMB. They do not need to borrow RMB from Chinese Sources...

[ltseung888]

https://www.dailyfx.com/forex/education/trading_tips/trend_of_the_day/2012/02/07/Short_Sell_Basics.html
Short Selling in the Forex Market

In the FX Market, transactions are handled differently than stocks.
First of all, each currency quote is provided as a 'two-sided transaction.'
This means that if you are selling the EUR/USD currency pair, you are not only selling Euro's; but you are buying dollars.
If you buy the GBP/JPY currency pair – you are buying British Pounds and selling Japanese Yen.
If you sell the AUD/NZD currency pair – you are selling Australian dollars and buying New Zealand dollars.
Because of this, no 'borrowing,' needs to take place to enable the short sale. As a matter of fact, quotes are provided in a very easy-to-read format that makes short-selling more simplistic.
Want to sell the EUR/USD?
Easy. Just click on the side of the quote that says 'Sell.'
After you have sold, to close the position, you would want to 'Buy,' the same amount (hopefully at a lower price allowing for profit on the trade).


*** It does not really matter how much RMB is actually available in the "International Market".  Traders or Currency Speculators can short (sell RMB without owning them).  They also do not need to borrow from any RMB holder source.  Just attack and drive the exchange rate low.  The Chinese Central Bank will have to sell its Foreign Exchange Reserve to pop up.  When the traders "gang up", they can drain the limited Reserve no matter how large it is. The refurnishing of the Reserve can never match the trading rate.  The big debate in the financial circle in China is - to protect the exchange rate or to keep the Foreign Exchange Reserve?

[ltseung888]

One strategy China can take is as follows:
(1)    Complain bitterly about the unfairness of the Foreign Exchange Trading System.
(2)    Disclose it openly and widely in all Media both domestically and internationally.
(3)    Announce the immediate suspension of all "offshore trading" of the RMB.
(4)    Restrict Chinese Citizens travelling aboard to have a small, limited USD currency.  The Citizens are not allowed to bring RMB overseas.  Make sure that the reasons are well explained.
(5)    Peg the RMB with the USD with a fixed exchange rate with no fluctuations within China.
(6)    Essentially use the Malaysia tactics used in 1998 at the Asian Financial Crisis.
(7)    Any existing RMB outside China can be used within China to buy goods and services.  The legitimate international holders will not suffer badly.
(    All International Capital outflow from China will need approval as a measure to prevent panic.
(9)    Seek the help of USA to peg the RMB internationally and redefine the Rule of the Game.

The What-If of this strategy will be carefully analyzed.  Ensure the strong measure is effective.  If no effective strong measure is taken, the RMB will collapse after the exhaust of the Foreign Exchange Reserve.  Panic will set in.  Citizens will lose faith in the Government.  The Chinese Communist Party may be toppled for failing to defend the economy!

Malaysia got out from the Asian Financial Crisis better than Indonesia, Thailand and South Korea.  These Countries got the support and "bad advice" from the IMF.
China can consider such a tactic well before the Foreign Reserve is exhausted.  For example, China still has 3 trillion.  The tactics will be used when the Reserve drops to 2.5 trillion.
Chinese Economists and Policy Makers should play with such what-if scenario now.  "Unofficial" channels can communicate such and other tactics to the outside world.  That shows that China will never panic.  The RMB will never free fall like the Rupee or the Ringgit..

[ltseung888]

Overheard on a bus trip:
Person A: "I just came back from my Village. A high speed rail will be built cutting the village."
Person B: "There must be protests as Government will take away the land."
Person A: "On the contrarily, the villagers welcomed it with open arms. The compensation package was too good. The cash compensation was 150% of the initial estimated value. There was a free 100sq. meter flat with all electrical appliances in one of the ghost cities."
Person B: "Why would I move to a ghost city?"
Person A: "Many of the neighbors would be there. Many jobs would be available including maintaining and cleaning the vacant units."

China understands the money incentive very well. In the 2008 World Financial Crisis, China pumped trillions of thin-air money to build Infrastructures. China compensated the affected villagers generously. That was why China could build so many high speed rails without objections. Money, Money and Money. (State Capitalism uses the money incentive.) There will be more high speed rails. There will be more compensations. The ghost city problem will be solved. (Build and furnish the units first. People will see actual units rather than promises. Most are happy to move.)

[ltseung888]

Malaysia got out from the Asian Financial Crisis better than Indonesia, Thailand and South Korea.  These Countries got the support and "bad advice" from the IMF.
China can consider such a tactic well before the Foreign Reserve is exhausted.  For example, China still has 3 trillion.  The tactics will be used when the Reserve drops to 2.5 trillion.
Chinese Economists and Policy Makers should play with such what-if scenario now.  "Unofficial" channels can communicate such and other tactics to the outside world.  That shows that China will never panic.  The RMB will never free fall like the Rupee or the Ringgit..

Trump wants RMB to appreciate so that Chinese Goods will not be that cheap.  If USA and Chinese Governments join hands to force the RMB up, what are the chances of Hedge Funds and Currency Speculators able to force the RMB down?