'No threat to markets' from Chinese exchange rate

[UpInArms]

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059480276234

John Taylor, the top international official at the US Treasury, denied on Wednesday that it would destabilise financial markets if the Chinese authorities stopped buying US Treasuries to hold down their currency.

He also declined to criticise the Japanese intervention to weaken the yen on Tuesday. The action, which ran counter to the recent Group of Seven statement on the need for flexible currencies, used the New York Fed as agent for the Japanese authorities, and many market analysts said it was a deliberate snub to the US.

But Mr Taylor, the Treasury's international under-secretary, said the US had an excellent relationship with the Japanese authorities, and the Bank of Japan and the ministry of finance were moving in the right direction in sorting out Japan's problems. "I think the use of the New York Fed is not unusual," he told reporters after appearing in front of a congressional committee. "The statement of the G7, which I read before, still speaks for itself. relationships with Japan and their finance ministry there are very good."

<snip>

Some economists have warned that the prices of US Treasury bonds could lurch suddenly lower, pushing up long-term interest rates, if the US got its way and the Chinese and other Asian countries stopped intervening to weaken their currencies. In the immediate aftermath of the G7 meeting in Dubai, Treasury prices fell along with the dollar, seeming to vindicate these worries.

...more...

better fasten your seatbelts, it's going to be a bumpy ride

[drewb]

1. Buy Chinese Stocks...

There is no way things are going to remain "status quo" if they let their currency float...

Buy China, buy lots....

Don't say I didn't tell you...

[Art_from_Ark]

2. Now wait a gol durn minute

Japan is intervening to WEAKEN the yen? Oh, how COULD they! I mean, it's OK for the US to publicly announce a plan to weaken the dollar vis-a-vis the yen, but, perish the thought that Japan would do anything counter to what the Bu$h treasury wants!

:eyes:

Methinks the big currency traders had a pre-determined rate of, say, 105 yen/dollar in mind before they started unloading yen, and they're PO'ed because Japan doesn't want to play.

[Coventina]

3. John Taylor?

How did the former bassist of Duran Duran become the top international official at the US Treasury?

I know I know.....I shouldn't be making light of the situation.

:spank: