Posted on 04/10/2008 10:00:39 PM PDT by steelboy
China’s currency, the yuan, rose against the dollar on Thursday, reaching a milestone that is just the latest sign of this country’s growing economic power.
For the first time in more than a decade, the dollar bought less than 7 yuan, ending the day close to 6.9920, a situation that specialists say will probably make Chinese-made goods more expensive for American consumers and possibly contribute to inflation in the United States.
(Excerpt) Read more at nytimes.com ...
It is going to 5.5 to 1 before the end of the year. Good time to buy the RMB.
We need to RAISE THE FRIGGIN’ RATES. PLEASE.
I feel like buying pesos or Canadian loonies before I lose out. Should've done this months ago!
Indeed. Raise interest rates! We're going to have a recession anyways. Might as well tackle it head on instead of trying to postpone the inevitable.
Raising the rate now...
* Wouldn’t increase oil production and wouldn’t drive fuel prices down in the long term.
* Wouldn’t cause Chinese or Indian product prices to go down in the long term. Domestic demand will continue to rise in those countries, as will demand from some of their other trading partners.
* Would temporarily worsen trade imbalances against US interests.
Keeping the rate low will divert investments back to US domestic production, and eventually, real economic strength. Balancing of prices between countries is a consequence of a global economy. A result of trying to cool a foreign economy in order to continue a trade imbalance is war.
The sad thing is that national/local domestic policy including both taxation and environmental anti-business facets will needs to be overhauled to make America attractive to invest in US production again. Current domestic policy is punitive compared to setting up production in China, Mexico or some other third world hell hole.
Watch for the democrats to make changing this situation impossible.
I agree.
Raise rates??? Not a chance, not for a while.
Cheese... Most economists have been complaining for years that the Yuan was held artificially low by China, contributing to a balance of payments deficit. Now that the Yuan is going up, it may “possibly contribute to inflation”.
No matter what happens, it is bad news for the U.S. as long as a Republican is in power.
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