When Renminbi appreciates 20 percent .One Renminbi Will be worth between ten and 12 cents against 15 cents now.Peoples currency(renminbi) is about shake up the financial world.Mao with its picture on all the notes is laughing all the way to the proverbial bank.
That means all the goods from clothes appliances ,cars,shoes computers and in really what we call stuff will be twenty percent more expensive.
It will have the effect of Substantial inflation on the us economy.Wages will be lacking in comparison to the the cost of goods .Then cost of goods in American life might be 15 percent( guesstimating) excluding food .
If Chinese Govt ( as in government enterprises ) continue to buy American companies our means of production and distribution of goods and services without letting us participate in Chinese economy.We can loose a substantial significant part of our economy because of naivete that our free market system will protect us.
FREE MARKET SMALL ENTERPRISE SYSTEM IS NO MATCH FOR STATE CAPITALISM PRACTICED BY CHINA.IF WE DO NOT WAKE UP TO THIS MENACE WE WOULD NOT ONLY FIGHT IN ECONOMIC FIELD BUT MIGHT HAVE TO FIGHT IN THE FIELDS WHERE BLOOD AND VALOUR ARE THE COMMODITIES.
How the Chinese will react once their value of US treasuries will lose 20 percent.Then again question is what are their other overseas assets are .Do they become more valuable than they were.Naturally their assets in raw material would not be effected and their real wealth only increases.
US can pass a law where larger Sovereign funds may be restricted from becoming majority share holders in medium and large companies.(valued at above 500 million)
I know this is not a well written piece.Concepts are valuable. If we are not thinking about them ,i am sure Chinese think tanks and business leaders are going through the scenario.I wonder if our leaders are running the war scenarios of economics fall out and what are they doing .Have we become paper tigers.
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