Economics 101 – Your currency must work for us!
A few rules apply in the world of currency exchange rates. And if the current furore over China's currency (the Renminbi) is anything to go by, no rule is more important than the one outlined below.
When the western world wants to buy loads of cheap commodities (and goods) from your country to satisfy demand fuelled by (toxic) credit; then your currency is probably over-valued.
If the western world no longer wants your country's cheap goods competing against their expensively produced alternatives; then your currency is probably under-valued!
It's a very simple concept which China and the Yuan have found themselves on both ends of in the space of a few years. Well as much as any wannabe super-power, intent on pushing it's weight around can be in the wrong end of something!
May 13th, 2011 - 16:59
How’s your name recognition?
May 16th, 2011 - 16:43
Not bad most times, though I don’t recognise yours.