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To keep its currency at the same level, the Chinese government buys foreign currency flowing into the country in excess of China's needs.
This sent a gold mountain of hard currency flowing back to the West, expanded the money supply, built the sweatshops of Lowell, Lawrence and Manchester and fueled the long boom that paid for the rise of 19th century Western imperialism.
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Mr Jen calls these "upstream currency flows".
Like everyone else, mone tarists recognize that stabili ty in world currency flows is critical to domestic monetary stability.
A law restricting all currency flows related to capital-account transactions and requiring exporters to deposit all foreign currency with domestic banks was passed in late November.
The arrest, disclosed last week in a report on Chinese television, has thrown a spotlight on the extent of illegal currency flows out of China into Hong Kong.
The one complication in the agreement was controlling foreign currency flows, an issue that Singapore, like many other Asian nations, believed was critical to avoiding a repeat of the financial crisis.
Prime Minister Wen Jiabao, who was attending a meeting of Southeast Asian leaders in Singapore, warned this week that the illicit currency flows could harm the financial stability of both the mainland and Hong Kong.
China is such a special case, because it's such a managed economy, centrally managed currency flows not being driven by the market.
Hence, as I point out in detail in my analyses of global market crashes, the 1973 bear market initiated a loosening of global currency flows with the abandonment of the Gold Standard, and established the seeds for global economic volatility.
They have been the gatekeepers of national currencies flowing between central banks and the general public.
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