The businesspeople and politicians who are urging China to revalue its currency had better be careful what they ask for.
Higher prices for imported T-shirts and DVD players would add to the bad news we've had recently on the inflation front. And did you ever stop to think what the Chinese do with the dollars we spend on their consumer goods? They use them to buy U.S. securities. If the Chinese buy fewer of our Treasury bonds, interest rates will rise and our booming housing and automotive sectors will feel the pinch.
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