House of Paine

the 4 aces

here they are folks 
the 4 corners 
of the global dollar 
           support network

all east asian

japan china taiwan and south korea 

the four aces 
combined sovereign dollar holdings
 approach 2 trillion dollars 


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4 aces 
part I

-------------------------
yuan ain't no  play thing 
------------------------------------


 china's currency  
     represents 
a problem for hot money players

the fucking wall crumbling 
currency speculators

like george soros

guys that can make most money 
brake-dance 

their problem with the yuan?

well
they like something 
they can play around with

 buy sell hold 
without any irrational hang ups 

"long as we all 
iz playin 
to the same ends
gain gain gain"

but fuckenstein

no can do with         
             the yuan

the han  CBers 
   retain a capital flow control system

the yuan don't float free 

though the han claim 
they are now  
"transitioning " to a free float

they certainly are not there yet
 
today 
   once you buy into   the yuan
you can't be sure you can
                 sell your way  back out 
 
if the han CBers 
for whatever reason 
drop the gate ...

if they decide 
they  don't want any one more
 getting  out at least for a  spell .........

you iizzz stuck

and believe me 
they don't have to make sense
meet a profit target 
fear an interest rate spike
or a run away inflation rate 

cause 
they "are"
 the yuan 
 
the source baby the source

they can make your yuan holdings 
value  drop 
when markets indicate your yuan should rise 

anytime they want
they can make you a loser for holdin' on  

and  they can make it stick...

so and hence and there fore 

the yuan is not 
a trustable currency
for specs to play with 

despite sound guesses
 as to its
gigantic  relative "real" exchange rate
under-valuation

spec's don't  hold it
till it pops
they sell it back to the  CBers
quick as they can 

this has  croaked 
the  dynamics 
a free to market yuan 
would have 

----------------------------------------
 even though the yuan 
   is 
selling  at 
maybe 1/4 
of 
 its  "free market" value
 
cause its
 managed  
against the dollar 

the two currencies ratios
have held steady now 
for near a decade 

while the hans 
have run a huge
         bilateral  trade surplus 
 
the valuation 
has not taken the buffeting  
the  intensifying
 pressure against   
say the yen would face
if that 
 free floating currency's 
  managers tried 
    similarly
to defy 
such  a strong updraft in the market 

yes the  value correction 
could be resisted as the recent yen rally has been
but at much higher cost
because there are players out there holding yen
that would get the pop

where as the yuan
has home only stashers
(though you can lend into the han economy 
you sure wouldn't just hold yuan 
till it rises)

the non float in other words 
has 
prevented 
a savage spec driven 
 attack on the yuans  cheapness

to see how big this gets 
 
realize 
  the yuan prolly needs 
a yen circa 1970's type
               super surge 
to get where it belongs now
ie 
a jump in ratio
against the first worlds "leading"
                              currencies 


--------------------------

re cap 

 the specs
can't 
 get the yuan 
where it belongs 

while the CBers 
can 
pull the wires so drastically

even 
call the whole game 
and totally freeze out
any private  winners  


------------------------------------

to be continued