On Aug 13, 2007, at 7:35 PM, bhandari at berkeley.edu wrote:
> http://www.berkeley.edu/news/media/releases/
> 2007/08/10_globalcapital.shtml
>
> Hi Doug,
> I thought implied in the above report was the explanation I gave
> for why
> US Treasury wants a faster appreciation of yuan vis a vis the
> dollar. I
> can't believe that the US Treasury would be exerting such pressure
> or even
> pretending to on the behalf of American workers in declining
> industries,
> so there must be another reason. And what could that be? An
> appreciation
> of the yuan vis a vis the dollar would raise the dollar value of
> the yuan
> US corporations are holding, no? US corporations seem ever
> dependent on
> profits made abroad.
> Again this seems implied in Bardhan's research.
What research? The URL refers to Chinese dollar investment in U.S. MBS (mortgage-backed securities, not Max B. Sawicky).
What yuan balances do U.S. corps have? They have to pay local costs in yuan, how do they accumulate the currency? How big are their reserves?
My impression is that the Treasury is responding to Congressional pressure, which is coming from smaller biz and worker electoral ire over China.
Doug