Devaluation of the dollar and the yuan a bad move: Every head has its own kind of headache

Filed in Business, Current affairs, Economy, foreign affairs by on November 12, 2010 0 Comments

The climate at the G20 meeting in South Korea is one of division and finger pointing. It is seen as a war of currencies.

China has been accused by the US and Europe as a manipulator of its currency, boosting its exports. Pressure on Beijing did not work. Finally, last week, the Feds decided to pump $600 billion dollars into the US economy. The consequence of such a move is that the value of the dollar will drop, therefore increasing US exports. The move has been seen as selfish by China and the other eighteen members of the G20. The US is certainly against the wall, not knowing what else to do to fix its economy.

The biggest losers in this war are poor countries. In bad times, each country tends to worry about its own economy. It is a bad move. Instead they need to find an economic agreement to solve the problem. The main troublemakers are the US and China. A devaluation of the US dollar and the Yuan will lead to worse economic troubles in the world economy. As the Himba of Namibia say, “Every head has its own kind of headache.”

,,

Tags: , , , , , , , , , , , , , ,