Careful What You Wish For . . .

July 21, 2005 9:25am by

Talk about timely:  Yesterday, I pointed to a fascinating piece of research/commentary from GaveKal Research Limited of Hong Kong, Stockholm and New York.

Today, the People’s Bank of China revalued the RMB by 2.1%, from 8.27 to 8.11 to the US Dollar, against a basket.

Be sure to read that piece as to some of the dangers to the US economy of this revaluation.

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More to come on this later . . .

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What's been said:

Discussions found on the web:
  1. L. Smith commented on Jul 21

    I’m not a currency expert but somehow I see this as a legitimate way for the chinese to move away from buying US treasuries to control the peg, and incorporate other currencies in their currency management operations. Is my understanding of this correct?

  2. Barry commented on Jul 21

    absolutely! Higher rates acomin’

  3. John East commented on Jul 21

    L. Smith,
    If the Chinese stop buying US treasuries how will the US fund its deficit? Can the US indebted consumer and mortgagee survive rate increases?

  4. Anmol commented on Jul 21

    US Gov is planning 900 Bill worth of issuance this year. Wonder who will buy ? And what happens when Malaysia, Thailand, India and the rest of Asia sell treasuries.. Bonds are getting knocked today..

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