For some time now, the U.S. government, business leaders, and top economists have been trying to pressure China into allowing its own currency, the renminbi or yuan, to gain value versus the dollar. The thinking is that a higher yuan would make American products more competitive.

Meanwhile, China has been cautioning the U.S. that a free-floating yuan could result in a lose-lose situation in which both economies would be damaged.

We think our government should be careful what it wishes for. In particular, the U.S. should consider that China may be much more right about the U.S. economy than its own economy.

Let’s assume for the moment that the Chinese want the yuan to rise but know that a higher yuan will create havoc in the developed world.

Being highly intelligent, the Chinese know that they shouldn’t unilaterally let the yuan rise. If it did, China would be blamed for the fallout. Just like the hustler who wants the mark to feel like a victim of his own greed, China wants the revaluation of the yuan to look like an act of reluctant self-sacrifice which it does to appease U.S. demands.

It will look like self-sacrifice, thanks to people like noted short seller Jim