June 29, 2005
China Is Propping up the Renminbi Not the Dollar
Tyler Cowen points to yet another article about whether the Chinese will keep propping up the dollar. Can we get real for a moment? If China made the renminbi freely convertible, the next step would be mad capital glight out of China into US dollars. The reason China exports is because that is the only way the Chinese have to protect their savings. It is simply way too risky to subject your lifesavings to the capriciousness of the Chinese government.
The Chinese aren't proppingup the Dollar. They are propping up the reminbe. Rememberig that fact should add a lot of sanity to many of these discussions.
Posted by Alex at 02:30 PM | Comments (0)
Comments
Post a comment
E-mail this entry to a friend!
