FRONT PAGE: "World Tries to Buck Up Dollar: Thailand, Korea, Russia Seen Buying U.S. Currency; Pressure on China to Boost Yuan," by Joanna Slater, William Mallard and Bob Davis, Wall Street Journal, 12 November 2009.
Timely headline for this week's Esquire column, reporting that China is coming under pressure not just from the EU but likewise from its own regional neighbors to relax its peg to the drooping dollar.
In effect, everybody recognizes how China is cheating by free-riding America's defensible effort (by not fighting the dollar's decline) to encourage a global rebalancing.
Great quote:
"It's one thing for the Chinese to ignore the U.S. and Europe, [Thailand's finance minister] said. "But when they start ignoring the developing G-20 it's a bit trickier."
As usual, as soon as the world crowns something as the "next big thing," the knives come out--and deservedly so in this instance. Yes, China's got its interior poor to think about, but now it's becoming clear that the ones who will pay for that logical devotion are the rest of the world's developing economies and impoverished populations.
China is simply closing the door behind itself as it moves upward.
And there's no way to sugarcoat that one.
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