Mervyn Lobo writes: The US sold their debt to the Chinese and now want to tell the Chinese that the Chinese currency is over valued?? The Chinese currency is backed by enormous reserves of the US dollar.......
Comment: Take a look at trade balance data.(http://dataweb.usitc.gov/scripts/cy_m3_run.asp) The smart Chinese people would say: buy gold rather than US bonds, but then who would buy Chinese goods? Available data indicates that the Chinese own about 8% of the US debt. Most of the US debt is owned by American people and the American Government. (http://usgovinfo.about.com/od/moneymatters/ss/How-Much-US-Debt-Does-China-Own.htm). If it came to that,the American people could assume that 8% owned by the Chinese and take measures to resolve the trade imbalance that is the root cause of this problem. Also it should be noted that the main question about the Chinese currency is that it seems to be about 20%-40% undervalued vs the USD and not over valued as stated. .http://money.cnn.com/2010/05/24/news/economy/yuan_revaluation/index.htm)
