the U.S. dollar is also artificially
With the global economy under increasing pressure from the potential default of Greece and widespread, poor economic data, the U.S. Senate voted yesterday to open a week of debate on the Currency Exchange Rate Oversight Reform Act of 2011. That piece of legislation is very important, because it would allow the U.S. to impose what essentially amounts to a tariff on goods produced in places like China, whose currency is ugg outlet widely known to be intentionally undervalued. By forcing the value of a currency down, a nation enjoys a competitive advantage in trade agreements and its debt is generally cheaper to repay.

Of course, the U.S. dollar is also artificially undervalued - and has been for decades. But that's probably another story for another time. Once word reached Chinese officials that U.S. lawmakers were looking at the Chinese currency as a potential solution for U.S. economic ills, they were not happy. uggs outlet Statements from at least three ministries within the Chinese government lashed out at the potential legislation, suggesting that the U.S. is attempting to blame others for problems of its own creation.

Under pressure from the U.S. and other countries, China has taken moderate steps in the past several years to increase the value of its yuan against the U.S. dollar and other leading currencies. But with economies sagging and increasing pressure on lawmakers and government officials, measures such as these are likely going to become more frequent. In fact, we may be at the precipice of a very dangerous period in international relations, ugg boots outlet based primarily on the fact that all nations seem to be suffering economically. With that sort of pressure in place, it's easy to envision economic arguments quickly escalating to military conflict. The U.S. and China will likely tread lightly around the currency issue, in the hopes that the mere discussion will spur more change in Chinese currency policy.