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Comment by reedlaw | Hacker News Reader

Ditto for the dollar. You're taking a bet on the Federal Reserve's competency in regulating the US economy.

Yeah, and given the results of the past decade I'm inclined to trust the Communists... Not that they're actually communists; they're just a really big national corporation, imho.

Indeed, more like a well-runned corporation with 1.3 billion workers.

Well run? You've obviously never been to China.

Why would you need to visit China to have an opinion that could be arrived at by looking at financials - a common practice in measuring success. Just look at a portfolio of large Chinese companies - they are doing well, thus I would also hypothesize that they are well-run companies.

The numerical data to which you have access is not necessarily accurate. Corruption, bribery, fabricated numerical data are par for the course here.

He was talking about China as a country and as an economy. If you come and visit, it is immediately obvious that there are problems.

Just because there are problems does not necessarily mean that (as a whole) it is being run poorly.

Chinese firms are riding a huge wave of growth driven by wage differentials. In this macro context, it's easy to make a lot of money with poor management.

*trillion

You might want to look that statistic up before you try and correct someone again.

Oops, I misread that as cash on hand, but looking at it again, I don't know how I could have mistaken it. Definitely not 1.3 trillion people...

I'm not inclined to trust the communists more than the Fed, but I am inclined not to put all my eggs into one basket.

The above discussion makes little sense.

By maintaining USD peg China has no independent monetary policy - it's monetary policy is directly influenced by Federal Reserve.

China, not the Fed, has ultimate control over their monetary policy. They can always change their monetary policy and probably will have to. Which is what the discussion is in fact about, if you read the original article.

China, not the Fed, has ultimate control over their monetary policy.

sure, but since 1994 they haven't really exercised that ultimate control:

http://en.wikipedia.org/wiki/File:1_RMB_to_US_dollar.svg

and despite all promises to the contrary last year, they are still not exercising it to any substantial extent:

http://www.google.com/finance?q=NYSE:CYB

If the Chinese keep up their peg, holding RMB is equivalent to holding dollars.

If they fail to maintain the peg, the RMB will most likely rise. Most US consumers are already exposed to the downside of this risk - they have expenses which will rise if the RMB goes up (e.g., all the goods they purchase which are made in China).

Holding RMB is a hedge against this.

Tell me more about it :)

I myself have a Long Straddle on CYB since some time last year, betting that it moves in either direction.

Let's just say hoping to make guaranteed profit cause chinese promised it isn't such a great strategy :)

They have 1 week more to move though, just in time for Paramount Leader's visit to D.C.

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