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July 08, 2007

China Yuan rising

Goldman Sachs strategists predict the People's Bank of China will let the currency advance 7.5 percent in the coming year, while JPMorgan predicts the yuan will climb 10.6 percent by March.

The yuan appreciated 1.5 percent last quarter as prices for items such as food, rent and transportation increased the most in 27 months. Goldman Sachs Group Inc. and JPMorgan Chase & Co. predict that inflation will force America's second-largest trading partner to let its currency strengthen at least 7.5 percent in the next year, more than twice as much as in 2006.


If this currency appreciation occurs and continues then my prediction of Chinas economy passing the USA economy in overall size on an exchange rate basis by 2020 will occur.

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