Despite the struggling economy the value of the dollar is soaring. Many economists believe that China is manipulating its currency, the renminbi. It is said that China has undervalued the renminbi for a good portion of the last decade to boost its thriving import-driven economy. This has angered many in Washington as Tresurary Secretary Timothy F. Geithner accused China of violating international norms. A swift devaluation of the dollar in the foreseeable future is not likely. There is not a country out there that wants to see its currency suddenly increase in value and have their exports go up in price.
In the United States, this is an issue of elitist vs. pluralist politics. Elitists (Wall Street, large corporations) are content with the weak renminbi. Many of the large American corporations manufacture goods in China and reap the benefits of the undervalued currency. Pluralists (agricultural producers, domestic manufacturers) are hurt by the high dollar. The higher the value of the dollar, the more competitive pressure on the agricultural producers and domestic manufacturers, thereby holding back job creation.
-Matt Osborne
http://www.nytimes.com/2010/09/19/weekinreview/19chan.html?ref=world
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