Please don't listen to these guys...

The IMF told China today that it would benefit from allowing its exchange rate to fluctuate. If the Chinese government listens to the technocrats in Washington, it could drastically undermine the profits of every firm importing from East Asia. As it stands, China fixes the Yuan at a value as much as 40 percent below economists' estimates of its true value, meaning that everything we buy from there costs a lot less than it should.

Cheap labor can account for a significant portion of the inexpensive motorcycles, wood furniture products, and other goods we're importing, but the undervalued Yuan may be the most important factor underlying our industry's profits. The good news for importers on this side of the Pacific: China doesn't have to listen to the IMF. They have enormous foreign exchange reserves, so they can just ignore the international bankers.

Nevertheless, no economy can maintain China's growth rate indefinitely, so there remains significant question of how the government can cool off the economy without causing it to stall. You can be sure we'll be following any news about a currency revaluation VERY closely. I might even lose some sleep over it... My advice: listen to our boy Greenspan instead.