Thursday, July 14, 2011

ny fed blog tells all

http://libertystreeteconomics.newyorkfed.org/2011/07/would-a-stronger-renminbi-narrow-the-us-china-trade-imbalance.html

message
pay no attention to exchange rates

let differential national "growth " rates rebalance trade

the forex arbitrage must be  maintained


"We find that a stronger renminbi would have a relatively small near-term impact
on the U.S. bilateral trade deficit with China and an even more modest impact on the overall U.S. deficit..
......we think that the gap will shrink.... primarily as a consequence of the high rate of economic growth in China"