China revalues the Yuan!

[floydian slip]

This is big folks! The first time in decades.

http://www.forbes.com/newsletter/200...apbox_inl.html

Mostly, I am concerned about monkeying with a situation as fragile as Chinese growth, credit markets and politics. They have their hands full already. There were riots in the suburbs of Shanghai earlier this week, and lots of recent violent incidents in rural areas. They have almost as many migrant construction workers as we have people. Doesn't seem to me that China blowing up would be a good thing for any of us.

There will also be a direct impact on the U.S. housing market. China's currency move translates directly into higher mortgage rates for American home owners, and it accelerates the end of the great American real estate boom by pushing home prices lower.

Wal-mart, Target, and most of the things we consume will be getting more expensive soon.

If anyone has learned anything about the PNAC, you would know the main goal is to contain China before they get to big economically and militarily. Could it be too late? What can you do with a surplus of 100,000,000 angry men ? Let them relieve some stress by rioting in the streets or ship them off with uniforms and guns and make them believe its all Americas fault.

Or will things be just fine?