Buzz & Banter
U.S. Treasury Secretary John Snow is making the rounds in Asia and, as expected, has so far missed no opportunity to call for China to end its fixed currency peg to the dollar.
Snow's argument, aimed at the Chinese while he is in Tokyo no less, that a "functioning financial system is one based on flexible exchange rates" seems rather weak in the face of the $77 billion Japan has thus far spent to artificially weaken the yen. Although media reports indicate Snow did not mention China directly in his comments, I wish anyone luck finding a newspaper that did not interpret his comments as specifically targeting China's renminbi peg.
Things only get weirder from there, though. According to a front page article in the Financial Times this morning, Snow sidestepped the issue of Japan's massive currency intervention saying that his views on it are a "private matter" between him and Japan's finance minister.
The questions I have are these: Since when are the treasury secretary's views on currency intervention ever a private matter? Why, then, are the treasury secretary's views on the renminbi valuation a public matter? At what point, if ever, will his views on the yen move from a private matter to a public matter?
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