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Paul Tudor Jones on the Chinese Renminbi

February 25, 2011

Paul Tudor Jones on the damage the undervaluation of the Chinese currency creates in the United States:

Key points:

- The Chinese RMB is 35% to 72% cheaper against the USD than it was in 1993

- The undervaluation of the RMB is a contributing if not primary contributor to the loss of 6 million US jobs

- The valuation of the Chinese currency forced a country like Vietnam to devalue vs the USD despite having a $10 billion trade surplus

- Foreign holdings of US Treasuries has risen from 20% to 50% since 1993

- History shows that debtor countries with that kind of foreign ownership of its debt suffer from instability and high inflation

- The undervaluation of Asian currencies is an invisible crisis that is creating global imbalances that dwarf the tech bubble of late 90s

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