January 21, 2009

Geithner Confirmation: China Currency "Significant Issue"

At the confirmation hearings today for incoming Treasury Secretary Timothy Geithner, sponsors of anti-free trade China currency manipulation legislation expected lip service to their belief that Beijing is "manipulating" Yuan exchange rates. Geithner obliged but his reponses were guarded. He said,

"I believe that it is in the interests of the global economy, not just our interests, that our major trading partners move over time to a more flexible exchange rate system."

Geithner pointed out that other major trading partners of USA (read: Japan) also need watching.

Is this a sign that the Democratic controlled Congress and President Obama will slap countervailing duties on China? And will the resultant price inflation of nearly every good bought and sold in the USA lead to wage inflation or just further erosion in standards of living?

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