There is an article written by Peter Schiff which seems to reflect a growing consensus - even though he is part of the maverick fringe - amongst US policy strategists that this is right at the top of the list of structural problems facing the global economy. However I would like to add a couple of dissenting observations, as I believe the RMB/USD issue is largely a red herring which can only confound the belief that the US - and other very indebted nations - will have to export their way out of their current malaises with products and services other than relying, as they have in the past, on their financial engineering skills.

The best export that the US (and UK for that matter) have come up with since the 1980's is a casino based financial system which is only tangentially connected to the real economy. The return on capital of companies like JPM, GS, Barclays etc far exceeds the equivalents of any new manufacturing companies that would be the beneficiaries if the renminbi was allowed to appreciate against the US dollar.

The Chinese may whinge about the state of the public finances in the US and the mismanagement of budgets but where else are they going to invest their massive surpluses other than in the US Treasury/government agency market?  They have been burned on investments in the Eurozone (and almost certainly will get even more so), and there is only so much they can plough into the Canadian/Australian economies; moreover the hugely indebted Japanese economy could well be the next volcano to erupt.

The new mantra emanating following a series of epiphany moments apparently experienced by politicians in the US, UK and the Club Med countries of Europe is that they all have to adjust their economic policies so that they can export their way back to prosperity. Not all countries can succeed from boosting their exports and rebuilding their capital reserves - it has some of the qualities of a zero sum game. Furthermore the idea of rampant consumerism from the BRIC nations would be incredibly onerous on the global supply of resources, clean water and air we can all breathe. Even more poignantly it will lead to the kind of cost push inflation that will make the debt burdens of the "advanced" economies totally unsustainable.

The current focus…

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