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Paul Tudor Jones on the Chinese Renminbi

February 25, 2011
Canadian Value

CanadianValue

210 followers


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

http://cache.dealbreaker.com/uploads/2011/02/paultudorjonestowardequilibration.pdf

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

About the author:

CanadianValue
http://valueinvestorcanada.blogspot.com/

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