Good note by Marginal Revolution on China. But:
Where is the discussion about the $2 tril reserves of China? Every 10% devaluation means $200 bil lost, for nothing. China should revalue, slowly.
US manufacturing jobs ‘lost’ are gone until the US becomes the low cost producer … [hopefully] not in our lifetimes.
The failure of Yen appreciation to stop Japan from continuing to have huge exports is a huge fact indicating that renminbi appreciation also won’t work to stop China from having huge exports. (‘renminbi’ is not even known to the comment spellchecker.)
It won’t be ‘good’ for the US to move to SDRs, but it’s probably better than China making the US gov’t borrow money denominated in renminbi. I’m surprised the Chinese aren’t offering that, at very low interest rates.