Lok Sang Ho

PBC's Proposal for International Monetary Reform

The key point is that countries that tie their currencies to the benchmark currency basket, with or without indexing against inflation, will be less influenced by exchange rate fluctuations caused by capital flow swings, which can be very damaging. I am not saying that all currencies can do this. Some currencies, particularly those from economies with greater financial market depth, should be allowed to float more freely, subject to monetary policy discretion. But other countries, those with shallower financial markets, can peg their currencies to the basket at levels that facilitate international trade.

America to China: Stop Buying Our Dollars! And Another Thing: Please Buy Our Dollars!

Many observers are paranoid. They don't know exactly what they want.

What the world needs now is more trade. That means more imports and exports from and to each country. That means exports need to be profitable. Corner exchange rates that make exports unprofitable for any country are destructive of trade. The whole world should guard against that!

Geithner on Yuan: Misstep or Warning Shot?

Factories in China are closing in tens of thousands, and many migrant workers who used to work in these factories have lost their jobs and returned to their towns and villages. There is a popular blog in China that is advocating greater savings as a new lifestyle(as if the Chinese were not saving enough already!). Job insecurity will hurt China's consumption and will reduce imports. China has canceled orders or frozen further orders for planes from Boeing. I just do not see how a stronger yuan would benefit America.

Strong RMB, Yen Not Good for the World

Remember the Plaza Accord in 1985 in which joint pressure was put on the USD to depreciate against market forces?