Chinese currency revision weighed

China's political leadership is actively considering breaking the 11-year link between the dollar and China's currency, the yuan, and tying its value instead to a group of currencies.

bushco has been pushing hard on getting the chinese to re-value their currency, the yuan, citing that its current fixed value of 8.277 to the dollar where it has been locked since 1998 during the Asian financial crisis, significantly understates its value... the real reason of course is the low price of chinese goods that are flooding world markets (including the u.s., of course) and hampering u.s. competitiveness... the idea is that raising the value of the yuan will make chinese goods more expensive and thus reduce the massive trade deficit... that's the good side...

the bad side is that if the yuan jumps in value and chinese goods become more expensive, the chinese might not continue to buy dollars after the shift and the fall-off of chinese purchases could hurt the dollar's value and u.s. stock and bond prices - and those developments, in turn, could impact the real estate bubble... personally, i think bushco's playing with fire... you'd think they would have learned their lesson after repeatedly putting their hands on the hot stove... but n-o-o-o-o...

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