The yuan’s peg has become the catch-all conclusion to the world’s imbalance problems. U.S. government officials, economists, and men on the street are pushing for China to revalue its currency against the dollar to revive American growth in key lagging industries.
But what if the yuan wasn’t at fault for the world’s economic imbalances? What if it really was U.S. easy money throughout the last decade, including the low interest rates that flooded the world with cash, that led to the Great Recession?
Albert Keidel of The Atlantic Council of the United States argues this, and says its not China to blame, but the U.S. for the economic position the west is in.
With China further tightening its bank reserve requirements, all signs are pointing towards a controlled slowdown in the world’s number one emerging market. It seems more likely now than ever that the yuan will not be drastically revalued.