James Fallows’ piece in the Atlantic — about the Chinese government’s efforts to keep its economy out of control by a really strict policy of buying dollars — is really good. A teaser:
The dollar’s value has been high for many years—unnaturally high, in large part because of the implicit bargain with the Chinese. Living standards in China, while rising rapidly, have by the same logic been unnaturally low. To understand why this situation probably can’t go on, and what might replace it—via a dollar crash or some other event—let’s consider how this curious balance of power arose and how it works.