the worm turns

We're thinking of taking a vacation in China next year, so once again I am compelled to pay attention to the Yuan-Dollar exchange rate. Suffice it to say I'm thinking that maybe it's a good idea to buy some Yuan now, because it seems like the chances that the peg will be intact six months from now are a coin flip.

Fixed exchange rates are a real pain in the arse. They save up all the day-to-day risks of floating rates and focus them within a short period of time. That's the exact opposite of what most people want.

They also encourage governments to complain about each other a lot. Last year our congress was bitching to China about it's undervalued currency, this year they do the same to us. Last year it's their currency and our problem, this year vice-versa. Either way, it's a bitch fest.