If You Were China..,

Wouldn't you look to have less of your reserves invested in a weak currency? I would. This is really bad news for the US. China lends us about $400 billion a year by buying our T-bills. They were fine to continue that until our fiscal policies and trade deficit drove the dollar to its new depths. If they decide to even moderately move away from dollar-denominated investments, the fall in the greenback and our economy could be precipitous. The housing market be damned.....better a recession than the long term consequences of a big dollar-dive. Bernanke needs to raise rates to ease the dollars' slide.
- posted by john @ 6:25 PM