China's currency

It is now abundantly clear that it was the US that was manipulating the powerful Western propaganda machine for ulterior motives. It was only recently that American deficits with China were attributed to the undervaluation of the Yuan by 40%. Then after the Yuan was appreciated by about 5% since the beginning of the year, it is now said that it is too high and should come down. In the meantime, America is still having massive deficits with China and 87 countries.

From the above it is clear that the West, particularly America, has no creditability. All their propaganda should be treated with the utmost contempt.

Oh crap. What excuse will the American emperors with no clothes tell their misguided public about the state of their economy now? What is the next great blame that will be heaped upon China? That China steals American inventions? Hahaha! If so, no wonder China produces quite a number of crap goods.... they should have been stealing from the Europeans, Japanese and Koreans instead. At least "copying" the Germans would produce a product of real quality than anything American invented (except maybe Apple's stuff... but too bad, the man at its helm is gone... no one wants to copy American cars nowadays, LOL!).

doesn't take a genius to realize that. I though, "oh, the yaun will go down a bit" when I read the economist article about china putting a million more people on the dole. it's no surprise.

while India's growth is disappointing

Wasn't there a blog entry about the decline of FDI in India, and its currency falling?

India backtracks on plan to let in foreign retail
NEW DELHI -- India on Wednesday suspended its plan to open its huge retail sector to foreign companies such as Wal-Mart in a reversal seen as a major capitulation to political opponents that further weakens the administration.

http://www.cleveland.com/business/index.ssf/2011/12/india_backtracks_on_...

Regards

I'm not sure how things are now but years ago when I was in Germany I noticed that the price of basic goods - food, the buses/U-bahn - was much cheaper vs. what I would have paid in the in the US.
The cost of non-basic goods - a Minolta or Canon camera, or petrol -was expensive.

Perhaps China is doing something similar which effect your Big Mac Index.

Remember, the yuan was relatively flat vs. the dollar for a period after the 2008 revulsion.
http://finance.yahoo.com/q/bc?s=USDCNY=X&t=5y&l=on&z=m&q=l&c=

BTW, what ever happened to "global rebalancing"?

Regards

The Economist:

“Yet, there are nonetheless signs of an interesting reversal for the yuan. As Josh Noble points out, the yuan has been butting up against the lower edge of its daily trading window. It appears that China may be intervening to support the currency; Chinese reserves have been falling in recent months.”

Speculative money is flowing out of Hong Kong as the China is taking steps to boost imports in the environment of slowing export growth, making a sharp decline in China’s trade surplus a certainty to placate critics of China’s trade surplus and RMB management. This raises the expectation of a depreciating RMB, which causes holders of dollars in the Mainland to refrain from exchanging the dollars for the RMB at the Chinese banks. So Chinese reserves should continue to fall until there is another dollar confidence crisis.

Another reason here for the falling Chinese reserves is the consequence of China’s policy of maintaining a stable US$-CNY exchange rate for her international trade settlement and investments so long as her international trade and investments are still mainly denominated in the dollar. This would give the impression that China is “re-pegging” the RMB to the dollar again and for future allegations that China has “re-pegged” the RMB to keep the RMB “undervalued” when, in fact, China is propping up a weakening RMB to keep it “overvalued”.

100kilo cabbage only cost 5 yuan, that is less than a US dollar. is that weird? China's currency is such a magical conjurer!

A Big Mac Index GDP per capita adjustment seems wrong for China. What proportion of the Chinese population has access to a Big Mac, or can afford one ? An adjustment using that group's GDP per capita would be much more comparable to the circumstances in the US, where just about everyone can buy a Big Mac.