Saturday, March 13, 2010

China ready to end dollar peg

Not like you have to be an expert in economics to foresee bad things due to the world's economic policies, particularly our own, but from what I gather from listening to experts such as those found at the Mises Institute and LewRockwell.com, China dumping the dollar is the equivalent to the lamb opening the sixth, maybe seventh seal of the economic apocalypse.

    The head of China’s central bank has given the strongest signal yet that the country will move away from pegging its currency to the dollar, but he said any changes would be gradual

    London Telegraph -

    At the annual session of the legislative National People’s Congress in Beijing, Zhou Xiaochuan, governor of the People’s Bank of China, said that the days of the “special yuan” policy were numbered. He described the dollar peg as a “temporary” response to the global financial crisis, but gave no timescale for any change in policy. The currency has been pegged at about 6.83 yuan per dollar since July 2008.

    Many economists expect China to allow the yuan to appreciate slightly this year, but the cautious tone by Mr Zhou means that any change may not happen for some time. He said that the central bank would maintain the “basic stability” of the currency. So, despite the fact that the Chinese economy grew by 10.7pc in the fourth quarter of last year, the country’s loose monetary policy looks set to continue.

Read all of it.