Mish has excellent analysis of this story, I just want to add a twist:
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The United States warned Beijing on Monday that the recent depreciation of the Chinese currency could raise "serious concerns" if it signaled a policy shift away from allowing market-determined exchange rates.Free markets? How can something be centrally controlled and also a free market? This sentence makes zero sense. How can exchange rates be set as a matter of policy and at the same time free?
Washington has been pressing China for years to allow its currency to trade at stronger values. A weak yuan makes Chinese exports cheaper for U.S. consumers at the expense of U.S. producers. A weaker yuan also makes Chinese consumers less able to buy foreign goods.Not if the Chinese are getting richer, and they are. "Pressing China to allow...?" In a free market, you can't press for anything, because peace and prosperity naturally flows. And as the article notes, any policy necessarily benefits some, harms others.
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