Sunday, January 1, 2017

To off set devalue ...impose export tax off set

In the prior post turner worries about a sudden run out of the yuan
And a big deval
Leading to a huge trading partner revulsion retaliation

Actually the deval can be off set by an export tax if nothing else

The import side can be managed with temporary quotas ie export based import warrants

Then a new currency can be introduced if the old yuan looks ruined

None of this exceeds to capacity of a plan economy with sufficient central powers like the PRCs

Those in the run put will simply punish themselves if the old yuan is allowed to drop by the B of C

Of course the system should be pre announced and put on stand by immediately

Currency problems are comparatively simple if you are prepared to act
The underlying causes if really speculation turned to panic simply need
bold and adequate state action

Again an operating mark up warrant system makes all this merely a mode shift !