I find it quite interesting that China having made so much noise over the depreciation of the USD is not even making a sound on the current depreciation of the Euro. In fact, based on my personal observations, I find that China has also stopped making noises on the depreciation of the USD.
Personally, I think that China has realised that the current export model that they are using will not work in this new norm. United States and the Euro region could no longer borrow extensively to finance the type of consumption that they have been used to for the last decades. China and other export related countries, have to change. The current crisis that started back in 2008 will not end unless the world economy finds a new model that does not rely on credit or over consumption to drive the economy.
Meanwhile, it will take many years before the countries in trouble can get back on their feet without their government's support. Seriously though, I think what Iceland did to their banks save them from further pain.
长痛不如短痛.
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