I know nothing about economics, but given that there was such a huge discussion here earlier about it, I thought I'd ask what the impact of the Yuan change will be on gaming, PC's, etc. Currently they are saying that it will be raised 2.1% higher than the U.S. dollar, but experts (Whoever they are) are saying it will go much higher. So how much more are we going to be paying for consoles, PC parts, etc? Any guesses? And how soon will we feel the impact?
K
According to what I heard yesterday on the radio, economists hope the yuan will go higher eventually. The U.S. has been pressuring China to stop artificially deflating the value of their currency for a while; many of the proponents had hoped that the value would change by 30%, but expected at least 10%. Some see the 2.1% change to be a good first step; others think it is a worthless change used only as a stalling tactic.
Thus, any effects had on Chinese imports may not be seen for a while. What those effects might be once the yuan is revalued more dramtically is something I leave to the more economically-in-the-know.
Actually, it's value is being raised 2.1% against the dollar, from 8.28 Yuan per dollar to 8.11 per dollar not 2.1% higher than the dollar.Originally Posted by Kevin J Baird
It's a fairly small move but it is also expected to cause other Pacific Rim nations to revalue their currency as well (Malaysia already did) so it's a little hard to say. I'd guess we wouldn't see to much movement in the short term.So how much more are we going to be paying for consoles, PC parts, etc?
Changes in the long term depend a lot on whether China actually continues to let the Yuan float or not, which is what everyone is wondering at this point.
The change is that they have no longer pegged the value directly to the US dollar. Instead, it is pegged to a basket of currencies (not sure which), and is allowed to float within a narrow range. It isn't a freely traded currency, but this is viewed as the first step.
The "US has been pressuring China" because exporters are noisier than society at large; US society as a whole benefits from China's yuan-pegging, as they're effectively giving us loans at lower rates than otherwise.The U.S. has been pressuring China to stop artificially deflating the value of their currency for a while; many of the proponents had hoped that the value would change by 30%, but expected at least 10%. Some see the 2.1% change to be a good first step; others think it is a worthless change used only as a stalling tactic.
The net effect on gaming will probably be zero; Chinese import costs aren't exactly a major factor of production
However, depending on how you think the US will handle a rise in its borrowing costs, all hell could break lose in general. Or not.
This will help lower our trade deficit, I can feel it :wink:.
It's allowed to float 0.3% / day from here on out. Actually it's allowed to float somewhat less than 0.3%/day due to the way the float is structured.
Still it's kind of weird. There are two kinds of currencies: ones that float and ones that are fixed. There ain't much in-between. And it seems that they are attempting to make a new class. I think that most people think it is going to behave much like a floating currency from here on out.
The really weird thing is that I *think* that this imposing of a limit on the change per day is going to make it so a person can make a one sided bet. I figure that is not going to last long.
Probably they allowed it to float so little because they wouldn't want a drastic change overnight, possibly causing an economic meltdown in China or a runaway inflation as people traded in their money for the now-cheaper dollars.
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