Geithner begs China for inflation

For a long time we said nothing about China’s weak Yuan-USD valuation because it meant low prices for American consumers.  It effectively meant that we had a whole nation of Chinese slaves working to make our lives better.  But now that the forward threat is deflation, low prices are not what the US government wants – quite the contrary.  It now wants prices to rise on everything which will include home prices.  That way the value of homes on the books of banks will go up and banks will eventually work their way out of the insolvency (paper value of liabilities is greater than assets) in which they currently find themselves.  Too bad if it means a higher cost of living for Americans.  Of course the government also argues that doing this will chase jobs out of China back into the US.  For those that believe this fantasy I have to ask “at what pay rate will these jobs rematerialize in the US?” Chinese get paid between ¼ and 1/100^th of what we are paid here in America.  You can’t live in America even at today’s prices for what a Chinese person makes.  What corporation is going to move jobs back to America unless it has a cost advantage?

http://www.businessweek.com/news/2010-04-04/geithner-delays-currency-report-urges-flexible-yuan-for-china.html