Lower-Redenomination (China)...

Article;
China risks following Japan into economic-coma.

Comment;

Recently I thought that any currency should appreciate in the long run and moreover its domestic value must also increase because marginal utility starts declining after reaching a height therefore prices start falling. So in the long-run we have increasing returns from money supply because prices start falling as every economy falls in deflation after a boom period. And, it makes sense why prices start falling in the long run because demand equals supply and after a point supply exceeds demand and prices start falling. We call it deflation and as an example we have Japan and the US… They are trying to avoid a deflation but it is natural for prices to fall in the log-run, as have been said before, and we can make use of deflation too to increase real wages and income (any type of wealth) by floating a lower denomination of a currency. So far China has used higher denomination means Yuan to Renmibi but now it has to move from Renmibi to Yuan. Money-supply wise more Yuan and less Renmibi in circulation. That would increase real value of the Chinese Currency. It seems logical that the domestic value of a currency should also appreciate in the long-run and not like the way it is executed in the real life. We choose higher redenomination when we should go down, I mean lower denomination. We are progressing therefore value of money must also increase…