Chart of the Day
The US Treasury Department once again decided to not brand China a currency manipulator. This despite evidence to the contrary. Today's chart illustrates how China devalued its currency to over eight yuan to the dollar back in 1994 – the same time that the North American Free Trade Agreement (NAFTA) was implemented. With some claiming that the yuan is currently undervalued by as much as 60%, China has been able to undercut the competition both home and abroad and has enjoyed an increase of its trade imbalance from $3 billion in 1994 to $13.8 billion today. All this has significant implications for the price of Chinese imports (a significant portion of what the US buys comes from China), the price of oil (China's economic engine needs ever increasing amounts of oil), US jobs (difficult to compete with a country that has cheap labor plus a large currency discount), interest rates (China buys US Treasuries to keep their currency undervalued and to help us buy more Chinese goods), etc. Stay tuned...
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Source - Census
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Quote of the Day
"There are a billion people in China. It's not easy to be an individual in a crowd of more than a billion people. Think of it. More than a BILLION people. That means even if you're a one-in-a-million type of guy, there are still a thousand guys exactly like you." - A. Whitney Brown
Events of the Day
May 14, 2006 - Mother's Day
May 17, 2006 - Cannes Film Festival begins (ends May 28th)
May 20, 2006 - Preakness Stakes
May 21, 2006 - Armed Forces Day
May 22, 2006 - Victoria Day (Canada) - French Open tennis tournament begins (ends June 5th)
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