Updraft $$$

Every downdraft is balanced by an updraft, and the up wash from the dollar's plummet has now caught the Yen. The pressure on the RMB now seems certain to increase. If China will not or cannot let the Yuan rise against the Dollar, inflation or even trade war could loom.

China's policy of undervaluing its currency "is increasingly being viewed by many countries as a source of unfair competition," [Treasury Secretary Henry] Paulson said, keeping up the rhetorical pressure on China to let the value of the renminbi, also known as the yuan, be set freely by market forces.

He forgot to mention that the US policy of living on borrowed money is even more at fault. Of course those who remember that Larry Lindsey got fired for suggesting that the Iraq war might cost as much as $100-$200 billion know that it's not possible to speak the truth in this Bush administration. The US needs to raise taxes, pay down the 9 trillion dollar debt, limit credit, and decrease consumption. Painful, but less so than the likely alternatives.

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