I’ve allowed my people to have a little fun in the selection of bizarre tobacco substitutes… Are you enjoying your cigarette, Ed?*

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by von

The Washington Post reports that China has partially de-coupled** the Yuan from the Dollar.  This move has long been requested by the U.S. Government, and is hoped to ease the U.S.’s trade deficit with China.  (HT:  Adam C. at RedState.)

We’ll be chatting more about China and trade issues in the coming weeks.  Suffice it to say, I view Chinese move on the Yuan as a partial response to the hue and cry that some have raised regarding PetroChina’s bid for Unocol. (The Unocol bid is ably discussed by Bernard Guerrero at Tacitus; short answer:  we do better with the Chinese in the system than outside of it.)

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*Points to identify the source of the quote.

**The Yuan is still pegged to a basket of currencies that includes the dollar, so it’s wrong to say that "China Severs Its Currency’s Link to Dollar" — as the Post’s current headline reads.

9 thoughts on “I’ve allowed my people to have a little fun in the selection of bizarre tobacco substitutes… Are you enjoying your cigarette, Ed?*”

  1. Way too many contextual clues, von. It’s better to offer one very obscure clue and bask in the confusion of your audience.
    Considering that you’re way better at this than I am, though, I should just keep my trap shut.

  3. The Yuan is still pegged to a basket of currencies that includes the dollar, so it’s wrong to say that “China Severs Its Currency’s Link to Dollar” — as the Post’s current headline reads
    But that peg will be allowed to gradually move up:

    The new system puts tight daily limits on changes in the yuan’s value but could allow it to change substantially over time.
    Beginning Friday, the yuan will be limited to moving each day within a 0.3 percent band against a collection of foreign currencies, the government said. But the officially announced price at the end of each day will become the midpoint of trading for the next day, which could let the yuan edge up incrementally.

    So according to the article the yuan could be allowed to appreciate .15% a day against the dollar if it is really undervalued. If that is true I would say the headline is pretty much correct. And if that is true, we are going to be living in interesting times.

  5. The truth of the matter is that I’m just interested, you know, in Principles of Modern Banking and the History of Piracy.

  7. The real issue is the trade gap with China, and the Hill thinking about slapping a 20+% tarrif on Chinese imports. PetroChina’s bid for Unocol simply added a little more air to the smoldering fire.
    It was all because of the piece of steak.

  8. The real issue is the trade gap with China, and the Hill thinking about slapping a 20+% tarrif on Chinese imports. PetroChina’s bid for Unocol simply added a little more air to the smoldering fire.
    Was that realistic, though? (Did it have the votes?) I took it to be bluster for the folks at home.

  9. I to be honest Von, I think tariff’s may have become a reality if it had not been for Greenspan and others reminding the Hill of their potential political fallout. It’s the kind of thing the right can get behind. We did it with steel and that was protecting us from European competition. And I think there are more folks sitting on the right side of the aisle now than when we said ok to tariffs on steel imports. I acknowledge we have since removed those tariffs.
    I give the Hill credit. We have wisely side-stepped the political fallout from imposing tariffs and jumped right into the path of PetroChina as significant threat to national security.
    But Saudi investment is ok.

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