Saturday, February 6, 2010


Unfortunately, China perceives any unilateral flexibility as a
sign of weakness. This is not the way to proceed with them, as they
have repeatedly demonstrated that any encroachment upon their
sovereignity will be rebuffed. Of course, this if for good reason...they understand that much of the power the western world
posesses is becuase they set the "rules" of the international game.

    Feb. 6 (Bloomberg) -- Major economies with
inflexibleexchange rates must consider allowing them
to strengthen to helpnarrow international trade
imbalances, according to a reportprepared for a
meeting of finance chiefs from the Group ofSeven.
    “Countries with inflexible nominal exchange rates
mustpermit greater flexibility in real exchange rates
either throughhigher inflation or a nominal appreciation
of their currency,”the document, drawn up by Canada’s
finance ministry and obtainedby Bloomberg News, said.    G-7 finance ministers and central bankers are meeting inIqaluit, Canada, today.    The document doesn’t mention which countries are viewed ashaving inflexible
China has attracted international criticism this year
fromforeign governments for controlling the value of
its yuan sinceJuly 2008 after it strengthened 21
percent against the dollarover the previous three years. 

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