China and other countries could team up to combat the excessive depreciation of the dollar

More on the Currency Wars!  Remember, currencies are a zero sum game.  When one falls, another has to rise.  The disruption is more than annoying, it affects employment, interest rates and politics. 

China is upset with the downgrade of their reserves.  Remember when the dollar falls, so does the value of their largest reserve currency.  This should not make them happy.  Forget about the credit risk (for a moment), the real risk is the falling dollar.  Via WSJ:
China could team up with other countries to prevent excessive depreciation of the dollar as one remedy for appreciation pressure on the yuan, Li Deshui, vice director of the Economic Commission of the Chinese People's Political Consultative Conference, wrote in an essay published Thursday in the China Information News.

Li didn't give any details, but said stable exchange rates are needed for stable trade and economic growth.

Li also said quantitative easing by the U.S. Federal Reserve wouldn't stimulate the economy but would boost fund outflows from the country.

Li also said yuan appreciation wouldn't boost U.S. exports and U.S. complaints about the yuan have a "true intention of restricting China's economic development."

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