Article

2010-01-14 Economy

US dollar to remain main global currency, says IMF

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Posted by Fred 2010-01-14 00:00|| || Front Page|| [3 views ] Top

#1 Strauss-Kahn called on China to raise the value of its currency, to ease criticisms alleging that Beijing keeps its unit artificially low.

Which contributes to the monetary problem. Had the Chinese currency floated, it would have, by natural process meant that the increase value/cost of manufacturing in China, forced a decrease in sales or shifting of production elsewhere. That would have thwarted the ability of the Chinese to park their wealth in so many US bonds [and by extension, inhibited the government from borrowing so much], but it would also have meant that China's economic miracle wouldn't have been as big, flashy, and successful as it has been. The Chinese self interest means that they will continue to undervalue their currency to maintain employment at home [even though they've lost millions of jobs already in the global recession] and export unemployment overseas. Unfortunately, its a game of monetary musical chairs when the unemployment overseas ends the ability to buy 'made in China' anyway. That's when it will all start to implode. The central Chinese government hasn't had the 'opportunity' to experience an economic depression during a period of raising expectations by their masses. The people have tasted the 'good' life. May they enjoy the interesting times.

Posted by Procopius2k 2010-01-14 09:42|| 2010-01-14 09:42|| Front Page Top

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