Anti Thomas Friedman

There has been a lot of talk about an artificially devalued Chinese Yuan by Beijing, keeping it low so to help Chinese exports which has been a major sticking point for the G20.. Obviously this has worked for China in terms of their export and output keeping their factories humming with lead-painted toys, TV's, electronic parts and clothes but it has also led to a major trade-imbalance as the Chinese virtually import nothing from the US except for some luxury cars.
With international pressure mounting to let the Chinese Yuan float naturally there is a lot of talk here to who this would benefit. There is no way an appreciation in currency of 10% will be enough to all of a sudden make US goods look cheap on the world stage and thus will have no real impact on US joblessness so to think this will boost our economy is silly.

What it will have is an adverse effect. We know a higher Yuan will make Chinese products more expensive which will only mean a TV or a microwave will cost the American consumer more. In other words American people living on stagnant wages will spend more for the same item they did 6 months prior. When they walk into Walmart or BestBuy or Staples they will pay higher prices.

Now I know there are other factors at play here (posturing, US Bonds, other low-wage countries wanting to get into the action, trade imbalance, perception etc) but I have come up with an idea

We trade China 500,000 troops to send to Afghanistan and in turn we keep the pressure off.
Chinese factories keep working
US Consumers can continue to get fat on cheap Chinese imports
NATO gets some much needed muscle in Afghanistan.


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