After years of exhorting China to increase the value of its yuan, the currency is finally rising. Why that's so is the result of the Fed's quantitative easing program. Here's how Bernanke managed to succeed where political wrangling fell short.
Leaders of 20 major economies on Friday refused to back a U.S. push to make China boost its currency's value. Despite some face-saving rhetoric, that will keep alive fears of a global trade and currency war amid criticism that cheap Chinese exports are costing American jobs.
Analysts lately have loudly proclaimed the end of the dollar, leaving investors looking to stay ahead with a choice of betting on stocks, which have 17% fallen in the last decade, or staying "safe" in very low-yield money market funds. But there is an alternative: commodities.
The U.S. trade deficit unexpectedly jumped to $46.3 billion in August, as the nation's deficit with China surged to a record $28 billion. Oil prices were the other key culprit as the petroleum deficit surged 5.7%.
A bill, passed by the U.S. House of Representatives Wednesday, would let U.S. companies petition for duties on Chinese imports -- a move that would hurt the global economy if it became law, the Chinese government said.
China's global trade surplus ballooned to $28.7 billion in July, a sign that promises to adjust its currency haven't yet begun to bite. That could spell increasing friction with Washington.
