The Chinese have announced a wider trading band for their currency, the yuan. Previously, the Chinese had not allowed their currency to change more than 0.5% in either direction. Now they will allow fluctuations of 1.0%. The change is not highly significant, but it will disarm some politicians who wish to label China a violator of world currency rules. The net effect will be to make imports into China a little cheaper, and exports from China a little more expensive. So China’s trading partners will find a little less money flowing out and a little more flowing in.
President Obama was in Colombia for a summit meeting of Western Hemisphere states. Once again, the US (and Canada) tried to pass a resolution condemning Cuba, but the Latin American states were adamantly opposed to the resolution and none was passed. The US has had an economic embargo on Cuba since 1961 and it ranks as history’s most futile diplomatic action. It has caused great misery in Cuba, but the regime has outlasted every American Administration since Eisenhower (Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush, and Obama). I would say that it is long past time to change policies.
The world’s newest state, South Sudan, has had an uneasy relationship with the state from which it seceded, Sudan. The relationship is extraordinarily complicated, but the recent fighting erupted over control on an oil field on the border. It’s unclear whether the fighting has stopped as of now, but an open war would be devastating to both sides. The people of that region have suffered tremendously over the last decade, and the oil reserves have been the reason why the outside world has helped both sides to carry on the fighting. Another example of the curse of oil.
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