Quote:
Originally Posted by Debi
I don't understand your reasonning. It doesn't matter if the price of materials goes up if you have more money circulating. The money raised will be used to give a second breath to company who saw their exports drop by 50 % in the last year.
Of course it will hurt the average salaryman who will spend x% more to buy the common goods. But in the end, it's better to lose some buying power than to lose your job.
And since the peg was lifted, the RMB valued a lot.
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What are you talking about? Print money to manipulate exchange rate? Sir do you have any idea how macro economics work? If you print money, eventually the cost of material and labour also goes up, you have to jack up the price to make a profit because your cost to produce goes up as well. Now you have to charge more yen for the same good so you are back to square one.
What you are saying is pay your workers less to reduce your cost so you can lower your price. Well duh, just pay them less instead of inflate. Much less damaging to the economy.
If devaluing the yen is all you want, then all you need is to do what the Chinese do to devalue the yen without creating all these problems associated with printing money such as inflation. Inflation isn't a good thing not to mention u need to jack up the interest rate sky high to contain it.
RMB is a managed float, it is not a free float currency and there are restrictions on how much RMB a person can buy. Its just a big open secret that it has been kept artificially low.