Strong $ AND strong yuan?

Reminds me of the guy who loves money and wants to abolish taxes.

I do think the push is now for a stronger $, however, and we’ll see tomorrow if the Fed is on board.

As a friend of mine pointed out, a firming $ will likely trigger domestic and international portfolio reallocations back towards US equities.

Paulson Push for Stronger Yuan Weakened by Global M&A (Update3)

By Aaron Pan and Belinda CaoDec. 10 (Bloomberg)

As U.S. Treasury Secretary Henry Paulson visits China this week to push for faster appreciation of the yuan, the bigger issue may be what China is doing to strengthen the dollar.

Paulson’s fifth trip to the nation as Treasury Secretary has taken on added urgency as the U.S. grows more dependent on the dollar’s decline to lift exports and keep the economy out of recession. While the pace of the yuan’s gains tripled in the past 15 months, Chinese officials now plan to increase investments in America that may boost the U.S. currency instead.

“China at this stage needs to be looking to opportunities provided by the weakening U.S. dollar,” Ha Jiming, chief economist in Beijing at China International Capital Corp., the nation’s largest investment bank, said in an interview last week. “Very recently the government is becoming more interested in channeling money out of the country.”