tag:blogger.com,1999:blog-3043548435115956173.post4584173890361081612..comments2023-09-10T02:37:10.790+02:00Comments on Raphaël Kahan: Buiter on bubbles and ChinaRaphaël Kahanhttp://www.blogger.com/profile/11365893744422424965noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-3043548435115956173.post-85884252416271749832010-02-10T23:36:19.954+01:002010-02-10T23:36:19.954+01:00thankyou sirthankyou sirAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-3043548435115956173.post-8239546284626195122010-02-10T15:36:36.275+01:002010-02-10T15:36:36.275+01:00I am not sure I understand your question... The ma...I am not sure I understand your question... The massive increase in reserves is not "masking" anything, it is more simply a direct consequence of the peg: in order to keep the exchange rate constant in the face of massive currency inflows (due in large part to exports), the PBOC has to buy a equal amount of dollars. If the PBOC didn't accumulate as many dollars, the exchange rate would increase and the trade surplus would not be as large.Raphaël Kahanhttps://www.blogger.com/profile/11365893744422424965noreply@blogger.comtag:blogger.com,1999:blog-3043548435115956173.post-13730501498682957882010-02-09T02:16:35.116+01:002010-02-09T02:16:35.116+01:00tracked you here from mpettis blog. good stuff.
W...tracked you here from mpettis blog. good stuff.<br /><br />Would it be accurate to say that the PBOC's reserves are masking the exchange rate distortions in the pegged 6.8 to 1 rate they offer their exporters ? <br /><br />Or is the increase in US/Europe purchasing power from the peg being paid for in real-time by stripping the savings of the Chinese exporters? <br /><br />Any thoughts would be appreciated regarding the where the imbalances lurk on China's end.. but i understand you are no doubt busyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-3043548435115956173.post-29472956875209896482010-02-07T23:47:14.861+01:002010-02-07T23:47:14.861+01:00Anonymous: yes, that is precisely the point I am t...Anonymous: yes, that is precisely the point I am trying to make...Raphaël Kahanhttps://www.blogger.com/profile/11365893744422424965noreply@blogger.comtag:blogger.com,1999:blog-3043548435115956173.post-2121608282915493152010-02-07T20:02:46.997+01:002010-02-07T20:02:46.997+01:00"Now, what you could in theory do is convert ..."Now, what you could in theory do is convert this dollars in yuan, and use the proceeds to recapitalise the banks."<br /><br />Don't agree. Banks' balance sheets are scorecards of internal balances within China. To fix bad balance sheets the CB has a yuan printing machine.<br /><br />Internal balances within China have nothing to do with external balances (reserves) towards the rest of the world.<br /><br />/JAnonymousnoreply@blogger.com