Although Treasury Secretary Geithner has issued this statement:
We welcome China's decision to increase the flexibility of its exchange rate. Vigorous implementation would make a positive contribution to strong and balanced global growth. We look forward to continuing our work with China in the G20 and bilaterally to strengthen the recovery.This move by China is about as welcome as a visit to a proctologist who use dental drilling tools.
The most significant result of this new policy by the PBOC is that they will have less demand for Treasury securities. With the alarming Treasury debt that will be issued in coming years the fact that China is marginalizing its direct need for dollars is another reason why at some point U.S. interest rates explode to the upside.
The full statement from the PBOC is in the EPJ Vault, here.