Hey America, This is just a heads-up that if you are in debt or not saving money, this “Yuan Flexibility”, if truly implemented, is gonna bite you hard. The cost for everything will go up and you will feel the pain. It may be worth it in the long run if it helps the U.S. retain jobs, but the way I’m seeing things is that it’s going to cause some real discomfort. Of course, China has been prevaricating about this issue for a while, so who knows if it will really happen.
It will also cause pain in China. I can already tell you what will happen. Factories here will close and move to some other countries like Malaysia or Indonesia. Contrary to the hope of the U.S. Congress, the jobs will not return to the United States (in order for that to happen, Congress would need to get rid of some strangling tax laws). This will cause yet another stir in the waters of the global economy. People will always look for the highest quality at the lowest price. So enjoy the sales on technology and household goods while they last, because if the Yuan is “equalized” against the dollar, you’re in for quite a price-ride.
winner-winner, chicken dinner 🙂