U.S. Criticizes China for Lack of Yuan ‘Flexibility’
Geithner this year has reiterated the U.S. commitment to a “strong dollar,” and a “special responsibility” to make sure the currency maintains its leading role in the global financial system.
Well isn't that just special... looks like the mythology of American exceptionalism and supremacy didn't die with the entry of Obama to the Presidency.
The other thing I've noticed just recently is that while for the last year the yuan has effectively had a fixed exchange rate with respect to the US dollar again (see here), prior to that it had what looks like an effective fixed exchange rate with respect to the Euro.
People may remember way back when China announced that they were going to stop fixing to the US dollar that, as a proponent of fixed exchange rates I felt it was a bad idea and that they should simply fix to the Euro.
It looks like for all intents and purposes they did this, permitting variance within a narrow band because if you look at the period between 2005 and early 2008, the rate varied only modestly from 10.5 yuan renminbi = 1 Euro. (see also the table here)
Wonder what's next in store for the fate of the US dollar.
