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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (261081)	4/9/2008 12:12:40 PM
From: c.hinton	Respond to of 281500

Tim, by maintaining the yaun dollar link china does indirectly set interest rates..... As long as that link holds, china guarantees the dollars value and its ability to purchase chinese goods. ie european importers can count on their dollars maintaining purchasing power in china even while those dollars loose purchasing power in europe. Remember that conundrum greenspan was going on about....? The value of dollars have had a chinese guarantee ....but only to cash in for chinese products ....its a nice game to spur exports if you have the economic clout to do it. American interest rates are saved that pesky risk premium to off set inflation. But this is now almost past history.