Those who have read my blog understand a peculiar relationship between the U.S. and China, the so-called Chimerica. Why did China start to peg the Yuan to the USD in the first place and how have they built their industrial power?
Some may or may not agree with this article written by Dee Woo.
Who is playing to the longview by understanding their strengths and weaknesses?
From Zero Hedge:
These are serious challenges Beijing’s now facing and seems to lack adequate policy tools to tackle...
Hedge funds and Fed’s QE2 are not all to blame for all these. The Chinese economy already stands close to the edge. What speculators do is to push it over and profiteer handsomely from the chaos. While the US enjoys the luxury provided by the dollar’s world currency status and diplomatic alliance with many major trade partners to export its liquidity and inflation, China enjoys none of that. They should look at the dollars in their hands with fear and doubt. So called Beijing consensus makes little sense, because the world is fast changing, pegging a country’s growth to a certain set of policy tools or a certain reserve currency (the US dollar) is equally dangerous. The battle between Keynes and Friedman has long proven the only consensus is to adapt and change. Right now China needs to adapt and change fast. Or this will be the best time in history to short China.
http://www.zerohedge.com/article/guest-post-boom-and-bust-chinas-rise
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