Tuesday, November 20, 2007

[Cyclelicious] New comment on Expect more expensive tires next year.

Anonymous has left a new comment on your post "Expect more expensive tires next year":

The Chinese Yuan doesn't float in value in the currency markets, but is actually coupled to the US dollar, as mandated by the Chinese government. The coupling used to be a rigid 8:1 (Yuan:Dollar), but a year or two ago China allowed the Yuan to be coupled to a "basket" of international currencies that was strongly weighted toward the value of the dollar. Today a dollar will buy 7.42 Yuan, but most economists believe the Yuan would have much greater buying power if China allowed it to be traded freely. (by keeping the Yuan artificially weak, China assures strong markets for its goods abroad)

Posted by Anonymous to Cyclelicious at 11/20/2007 10:41:00 PM