China dollar peg removed. What now?

[lazyday]

Strike it rich, trading currencies!

Of its 70,000 customers, the firm estimates nearly half of them signed up this year. Customers need a minimum of $2,000 to open an account and can borrow up to 100 times the value of the account, though Mr. Niv says 15 to 20 times leverage is more typical....

As Mr. Niv sees it, foreign-exchange trading is less risky than investing in stocks because currencies tend to move in multiyear cycles, making it easier to spot a trend. "You're trading oil tankers here," he says, "not speed boats."

Yet many of his clients like to race. Vitaly Trushkov, a 24-year-old engineer in Ferndale, Wash., opened a $3,000 account, borrowed three time that much, and saw a 25% gain in two months of trading. "I'd call myself a short-term trader," he says of his winnings.

Still, Mr. Trushkov seems ready to make a deeper commitment to currency trading. "I'm probably going to do this full time," he says. "That way I'll have time at home with my wife and daughter."

http://online.wsj.com/public/articl...-GETCAL76_OmvnT7Q9E_AzWzhefQ_20060726,00.html

 

[brewer12345]

Trushkov will likely end up where the vast majority of the dot com daytraders ended up: back at work, a lot poorer than they started.

 

[lazyday]

A few words from Jim Rogers on Yuan: http://www.investmentu.com/IUEL/2005/20050721.html

So China is taking very small steps toward making this a completely convertible currency. It will happen by 2007, under the terms of the World Trade contract they have – you know, they joined the World Trade Organization. And they’ve got the Olympics in 2008. So certainly by 2008, China is not going to be sitting around here with a blocked currency anymore....

I know that hundreds of billions of dollars are being poured into China to take advantage of the rise in the renminbi. First of all, whenever something like that happens, it wouldn’t surprise me if this renminbi didn’t go down for awhile, because all those people who poured hundreds of billions into China to speculate have got to get it out.

But whether it goes up or down in the beginning, I don’t care. I’m going to be buying more of it myself. Because longer term, the renminbi’s going to be a big currency, a great currency.

The consequences, again, there have been hundreds of billions of dollars of speculation on the renminbi, and that always worries me. So I know there are going to be some surprises. I just wish I were smart enough to know exactly what the consequences will be and what the timing will be.

I’m not one of the people pouring money into China right now to speculate on the renmimbi, that’s for sure.

Funny how easy it would be to badly quote him, by picking only some of the above sentences.

 

[MetryOp]

This should clear up everything.  From the People's Bank of China.

http://www.pbc.gov.cn/english//detail.asp?col=6400&ID=547

"Solemn Statement by the Spokesman of the People's Bank of China



The reform of the RMB exchange rate regime has triggered widespread coverage and considerable support from the media both at home and abroad. However, certain foreign media has misled the public and even wrongly speculated that the revaluation of RMB by 2 percent was only the first step in a series of adjustment, which could "lead to expectations for further RMB revaluation by the People's Bank of China in the non-distant future".



To promote correct understanding of the RMB exchange rate regime reform, the People's Bank of China is hereby making solemn statements as follows:



First, a revaluation of RMB by 2 percent, effective in the beginning of the exchange rate regime reform, does not in the least imply an initial move which warrants further actions in the future.



Second, the 2 percent revaluation of RMB was calculated and conducted to maintain the RMB exchange rate basically stable at an adaptive and equilibrium level. Such an adjustment was determined considering the size of surplus and the needs in restructuring of China's foreign trade while at the same time taking into account the resilience of the domestic enterprises to absorb the risks, basically satisfying the needs to achieve a broad trade balance in goods and services.



Third, the reform of the RMB exchange rate regime must be proceeded in a gradual way. "Gradualism" is the principle applied in the reform of the RMB exchange rate regime, rather than in the adjustment of the RMB exchange rate. The reform is focused not on the quantitative adjustment of the RMB exchange rate but on the improvement of the RMB exchange rate regime.



The People's Bank of China welcomes the attention and support on the reform of the RMB exchange rate regime from all walks of life, both at home and abroad, and is looking forward to responsible and objective coverage of the reform based on correct understandings. "



Submit Date:2005-7-26 16:29:00