It’s nothing new that relations between China and the US are more tense these days, but Congress and Tim Geithner are beginning to fear that in the not-too-distant future, the Chinese Yuan could overtake the US Dollar as the world’s reserve currency.
That is exactly what Mr. Dennis Gartman suggests this morning in his Gartman Letter, saying that Congress is full of “idiots” and that their decisions are “truly, truly stupid” because they signed a letter with Tim Geithner that was sent to China. The letter stated their concern over the need to boost the value of the Yuan. Says the letter:
The impact of China’s currency manipulation on the U.S. economy cannot be overstated. Maintaining its currency at a devalued exchange rate provides a subsidy to Chinese companies and unfairly disadvantages foreign competitors.
Chalk another one up for the Krugman brigade.