Saturday, April 30, 2005

Testing the Water: China Plays Currency Games


The the longest time Americans have demanded the Chinese revalue their currency. No such demands are made with Japan who can't connect their perpetual depression with their perpetual currency game of constantly devaluing the yen by purchasing excess American dollars which we happily churn out and ship off to Japan. Since the Japanese hold much more of our debt than the Chinese, one would suppose we would be much angrier about their currency manipulations.

After all, it is Japanese cars that are killing our native car industry!

But, as usual, geopolitical games of Go trump mere domestic politics and we allow this to continue. On the other hand, our identical situation with China somehow ticks off everyone in our government! But several interesting things happened this week that roiled the international currency markets, all of which came out of China:


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