Wednesday, October 20, 2010
Phil Flynn: Shanghai Surprise
In the real world a currency that is allowed to float would normally increase the value of its currency. The Chinese, by raising interest rates, it was almost like a de facto increase in the value of their currency. By doing that it raised worries that even a slight slowing in the Chinese economy could slow the growth of neighbors and the uncertainty surrounding their next move improved the value of our beaten down greenback. It also reduced the price of commodities that threatened to derail the global economic recovery. We all know that the US is pressuring China to increase the value on their yuan and that commodities have......Read the entire article.
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