Dollar and Values

Saturday, September 12th, 2009

Dean Baker makes an interesting observation in this post, The Post Says the U.S. Needs China to Hold Down the Value of its Currency:

The issue is that China is buying up U.S. dollars in the form of U.S. government debt. The Post tells readers that the country is dependent on these purchases of debt. This is the Post’s invention. If China stopped buying debt, the dollar would fall relative to the yuan (and other currencies) making imports more expensive and our exports cheaper to other countries. The result would be a boost to U.S. exports and growth.

(Via Beat the Press.)


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