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The problem with China
Rank: Member Joined: 8/15/2015 Posts: 817
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What Xi Jinping is running up against is what international economists call the trilemma, or the impossible trinity. It says that a country can’t have all three of the following things at once: a flexible monetary policy, free flows of capital, and a fixed exchange rate. They fight one another. As soon as China started allowing free (or at least freer) flows of capital, it was inevitable that it would have to give up on one of the other two objectives. If it wanted to keep the yuan from falling, it would have to raise interest rates higher than is good for the domestic economy, essentially giving up on setting an appropriate monetary policy. Or, if it wanted to set interest rates as it pleased, it would have to allow the yuan to sink.
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Rank: Member Joined: 8/27/2010 Posts: 495 Location: Nairobi
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Cornelius Vanderbilt wrote:What Xi Jinping is running up against is what international economists call the trilemma, or the impossible trinity. It says that a country can’t have all three of the following things at once: a flexible monetary policy, free flows of capital, and a fixed exchange rate. They fight one another. As soon as China started allowing free (or at least freer) flows of capital, it was inevitable that it would have to give up on one of the other two objectives. If it wanted to keep the yuan from falling, it would have to raise interest rates higher than is good for the domestic economy, essentially giving up on setting an appropriate monetary policy. Or, if it wanted to set interest rates as it pleased, it would have to allow the yuan to sink. Cornelius, you copy and paste without giving the sources, making people think these are your words. The full original article is here: http://www.bloomberg.com.../china-s-capital-flight
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Caroline Matako* Syndrome Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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Ash Ock wrote:Cornelius Vanderbilt wrote:What Xi Jinping is running up against is what international economists call the trilemma, or the impossible trinity. It says that a country can’t have all three of the following things at once: a flexible monetary policy, free flows of capital, and a fixed exchange rate. They fight one another. As soon as China started allowing free (or at least freer) flows of capital, it was inevitable that it would have to give up on one of the other two objectives. If it wanted to keep the yuan from falling, it would have to raise interest rates higher than is good for the domestic economy, essentially giving up on setting an appropriate monetary policy. Or, if it wanted to set interest rates as it pleased, it would have to allow the yuan to sink. Cornelius, you copy and paste without giving the sources, making people think these are your words. The full original article is here: http://www.bloomberg.com.../china-s-capital-flight
Pesa Nane wrote:Caroline Matako* Syndrome  Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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MaichBlack wrote:Ash Ock wrote:Cornelius Vanderbilt wrote:What Xi Jinping is running up against is what international economists call the trilemma, or the impossible trinity. It says that a country can’t have all three of the following things at once: a flexible monetary policy, free flows of capital, and a fixed exchange rate. They fight one another. As soon as China started allowing free (or at least freer) flows of capital, it was inevitable that it would have to give up on one of the other two objectives. If it wanted to keep the yuan from falling, it would have to raise interest rates higher than is good for the domestic economy, essentially giving up on setting an appropriate monetary policy. Or, if it wanted to set interest rates as it pleased, it would have to allow the yuan to sink. Cornelius, you copy and paste without giving the sources, making people think these are your words. The full original article is here: http://www.bloomberg.com.../china-s-capital-flight
Pesa Nane wrote:Caroline Matako* Syndrome 
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