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Heavy-Handed Politics

"€œGod willing, with the force of God behind it, we shall soon experience a world
without the United States and Zionism."€ -- Iran President Ahmadi-Nejad

Sunday, December 21, 2008

BREAKING CHINA'S PIGGY BANK

During the first days of December there was a barrage of rumors that China was going to devalue its currency (the renminbi or RMB), causing an abrupt drop in the US stock market. A drop in the RMB would have been a disaster - a game of chicken that would have plunged both China and the US into the abyss. All heck broke out diplomatically and financially.

It was a harsh message just before Treasury Secretary Henry Paulson came to Beijing for the China-US Strategic Economic Dialogue (SED) meeting (12/04-05): Be nice and kowtow or else. As the main Chinese state banker Gao Xiqing says, "Be nice to the people loaning you money."

Who is to blame? [Read more]

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