Yuan Debate Continues
© kalleboo
I saw a very thought-provoking article on the Chinese Yuan early this month. I filed the article, but didn't writing about it because, well, I've written about the Yuan several times in the last year and it would be possible to let that single topic take over any blog on China's economics.
In the article, John Tamny basically argues that currencies should be more like units of measurement that like commodities. The dollar, the Yuan, the Yen, the Euro, the Indian Rupee, the Congolese Franc, and even Laos' Kip should have a more or less fixed value. When they begin to float like pork bellies on a futures market, it becomes difficult to make economic decisions. Can you imagine a world where the length of the inch or the hour changed from day to day based on how much demand there was for time or for tape measures?
But the debate has heated up. Peter Schiff thinks the Yuan should be stronger. And he thinks that the Chinese are manipulating the value of the US Dollar, not the value of their own currency. Like a number of economists (including US Treasury Secretary Tim Geithner), Schiff seems to think that the relative value of the Yuan to the Dollar is a major economic structural problem that is creating dangerous imbalances of some kind. On the other hand, Clive Corcoran thinks the issue is a red herring.
Will the value of the Yuan change significantly soon? What will be the real consequences if it does...?
© kalleboo
I saw a very thought-provoking article on the Chinese Yuan early this month. I filed the article, but didn't writing about it because, well, I've written about the Yuan several times in the last year and it would be possible to let that single topic take over any blog on China's economics.
In the article, John Tamny basically argues that currencies should be more like units of measurement that like commodities. The dollar, the Yuan, the Yen, the Euro, the Indian Rupee, the Congolese Franc, and even Laos' Kip should have a more or less fixed value. When they begin to float like pork bellies on a futures market, it becomes difficult to make economic decisions. Can you imagine a world where the length of the inch or the hour changed from day to day based on how much demand there was for time or for tape measures?
But the debate has heated up. Peter Schiff thinks the Yuan should be stronger. And he thinks that the Chinese are manipulating the value of the US Dollar, not the value of their own currency. Like a number of economists (including US Treasury Secretary Tim Geithner), Schiff seems to think that the relative value of the Yuan to the Dollar is a major economic structural problem that is creating dangerous imbalances of some kind. On the other hand, Clive Corcoran thinks the issue is a red herring.
Will the value of the Yuan change significantly soon? What will be the real consequences if it does...?
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