10 August 2007

Could China wreck our currency?

There's been something of a stir recently over hints that if the US restricts imports from China (or, presumably, does anything else that the Beijing thugocracy doesn't like), China will retaliate by dumping dollar-denominated assets to drive down the value of the dollar. Here's a good explanation (with links) of why this won't happen.

With all the stories recently about toxic or otherwise dangerous imports from China (the latest is toys painted with lead-based paint), it wouldn't surprise me if American consumers become reluctant to buy Chinese-made products regardless of what Congress does or doesn't do.

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