今天，还是大年初二，江南村妇真的不想贴上这样的文章，但看到《Hyperinflation Will begin In China And It Will Destroy The Dollar》这样的标题时，心里真是格顿格顿的，但Eric deCarbonnel文章中写到的内容也是我意料之中的，并且也是我一直在提醒大家的事情。在08年末就在本博用“金皮书”来形容房地产，告诉大家中国一定会用通货膨胀来接轨房地产价格，我想时间会告诉大家中国将要面临的通货膨胀有多大。有一位朋友大年初一还在问我这个问题。本文作者Eric deCarbonnel,就是写美圆十大威胁的的那位，此人在经济研究方面有相当成就，也是我比较喜欢的经济学人之一。全文比较长，分三次贴完，上贴如下，博友们假若阅读有困难，可以借助翻译器阅读，实在有困难，过几天我有空时，给大家翻阅后再贴到本博。为了大家方便阅读, 我特去找了一下翻译器,地址如下:http://translate.google.com/translate_t#en|zh-CN|Hyperinflation%20Will%20begin%20In%20China%20And%20It%20Will%20Destroy%20The%20Dollar

09年起，江南村妇本人也比较忙，很难花很多时间写博，一部份博文想用采用本人每天阅读到的比较好的文章加江南观点及讲解的方式写博；有时间时，本人也会亲自动手写点感想。09年是特殊的年份，我真的不敢把自己全部的观点写在上面，请大家原谅。

-----江南村妇加编者按

The conventional wisdom on China is dead wrong. Specifically, there is a widespread belief, as expressed by Goldman Sachs, that "China will keep the yuan trading within a narrow range in 2009 due concerns about exporters." Worse still, others are even predicting that China will devalue its currency! The sheer wishful thinking is astounding! The idea that "China will keep the dollar peg to help its exporters" ranks all the way up there with "Housing prices always go up" and "You can spend your way to prosperity".

THERE ARE NO FREE LUNCHES

If you have learned nothing else in the last year and a half, you should have learned that if something sounds too good to be true, that is because it IS too good to be true. The media overwhelmingly presents China's dollar peg as a win-win situation: Americans get cheap imports and low interest rates while China gets a strong manufacturing sector. While commentators do sometimes debates whether China will keep lending us money forever, they never talk about the REAL problem with the dollar peg.

Below is a chart which shows how China's dollar peg works. See if you can spot the downside that the media never seems to mention.

The US's trade deficit requires China to print money!

The little discussed downside of the dollar peg is all the money China has to print to maintain it. China's Central Bank puts the extra dollars it receives from its trade surplus into its growing foreign reserves and then prints yuan to pay Chinese exporters. This results in an increase in China's base money supply by an amount equal to the increase in its foreign exchange reserves. While China's ability to keep accumulating US reserves is endless, its ability to keep its money supply under control is not.

The true threat to the dollar peg

If there is one development which could force China to drop its dollar peg, it is out of control inflation. Rampant inflation would result in millions of citizens starving and would create widespread social unrest. Keeping food prices low is a matter of political survival for Chinese authorities. So, facing the choice between losing their grip on power and losing the dollar peg, they will not hesitate for a second to sacrifice the dollar to save their own skin.