Paul Tudor Jones on the damage the undervaluation of the Chinese currency creates in the United States:
[url=http://cache.dealbreaker.com/uploads/2011/02/paultudorjonestowardequilibration.pdf]http://cache.dealbreaker.com/uploads/2011/02/paultudorjonestowardequilibration.pdf[/url]
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
