Forcing Yuan Re-valuation May Yield Negative Results for USD

Obama has recently been attacking the yuan and its low value relative to the dollar, in essence what he aims to do is to increase the yuan/dollar ratio so that US debt to China actually decreases in a real sense. This is also aimed at increasing US manufacturing competitiveness towards Chinese customers and the world.

However, the low value of the yuan which is pegged to the dollar actually supports the dollar’s value and is a buffer against inflation. By allowing the yuan to freely float Obama invites hyper-inflation sooner rather than later.

Admittedly, there simply aren’t enough jobs in only the high-tech and service related industries to keep every American employed. Manufacturing jobs are also crucial to national defense, and are these industries are often at the heart of great inventions and improvements to quality of life.