Go Read: US-China Tussles Over Currency Exchange
You may have heard that next week President Obama will be visiting Asia, and significantly, the People's Republic of China. One big bone of contention is the way China pegs its Yuan (or RenMinBi) to the US Dollar. For a long time, it was at 8Y : $1USD. Currently it seems to be running 7:1. The US has been trying to get China to change the practice, and this post from Campaign for America's Future explains why.
Would prices go up at Walmart if China changed its currency to reflect the dollar's relative weakening worldwide? Probably. But maybe, as even Treasury Secretary Geithner has said, American workers would have a fighting chance if the RMB were to stop being manipulated to China's unilateral self-interest.
In the next week, it'll be interesting to see if the initial softening of China's Central Bank to the more flexible policy Geithner called for will continue after President Obama and President Hu Jintao meet.
Cynematic blogs at P i l l o w b o o k. Her retired parents, like many in the Chinese diaspora, spend part of the year living in Shanghai and maintain a connection to the country of their birth. It was her dad, a lifelong basketball fan, who told her Le Bron James' nickname in China is "Lao3 Bei2 Jing4" or "Old Beijing."
Do you people ever even allow the possibility that perhaps King Barack should not be increasing the deficit and thus further weaken the fallen dollar?
Posted by: bbill | November 16, 2009 at 08:04 AM
The currency dispute between the United States and China has often reached a fevered pitch over the past decade, but both nations have softened their stance ahead of U.S. President Barack Obama’s visit next week.
currency
Posted by: ventype09 | November 16, 2009 at 11:40 PM
The falling of the US dollar is not a "currency dispute" but a consequence of not having money to back our spending...just as it would not be wise for individuals to borrow with very little (or no) collateral, it is extremely unwise, irresponsible, and unhealthy for our country to do so. Furthermore we are not only endangering our stature in terms of China and all other nations, we are guaranteeing American workers less buying power with the limited increasingly worthless dollar....so I guess even if he can't afford to live and eat well we should take care of his medical needs...okay, if this is the America
you want; I don't.
Posted by: bbill | November 17, 2009 at 09:17 PM
Do you follow history? Did you see what happened to Mexico when they stopped pegging the peso to the dollar and started letting the peso float...MASSIVE INFLATION! This would probably happen in China too. Everything produced in china would be so much cheaper. Walmart would make a killing...and American workers would be the ones paying with their jobs.
Posted by: Amy Aldrete | November 18, 2009 at 06:30 AM
No, I don't "follow history"...the academic arenas in which I was educated don't teach "following"; they actually teach theory and analysis. where did you get your political science and global economic degrees? Oh, I forgot, Obamaites don't need them. Sorry.
Posted by: bbill | November 18, 2009 at 07:52 AM
Amy, perhaps you should send your astute commentary to Wharton; I'm sure they'd love to hear from you. What a refreshing analogy!
Posted by: bbill | November 18, 2009 at 08:03 AM
Amazing how the deficit hawks are making noise now after being asleep for almost all of W's two terms--and that expensive two-front war President BUSH got us into. You couldn't have piped up then?
Posted by: Cynematic | November 22, 2009 at 11:03 PM
i think i will make a lot of money from this Currency Exchange :)
thank's.
Posted by: fx | July 14, 2010 at 03:17 AM