Will An S&P Downgrade Help Geithner Lower The Yuan Against The Dollar?

The WSJ hinted that a negative assessment of United States debt by S&P may lead China to stop buying U.S. government bonds and possibly to even start selling them. If China went this route, it would help to raise the value of the yuan against the dollar, which is exactly the policy that Treasury Secretary Timothy Geithner claims he is urging on China. In this sense, the negative report from S&P may be great news for the Obama administration and its efforts to increase U.S. exports.

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