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U.S. Designates China as Currency Manipulator

wsj.com

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Re: U.S. Designates China as Currency Manipulator

#11

Post by lazyguy »

devoply wrote: post #6
kasey_junk wrote: post #5

The best part of this is that they are being called a manipulator for not shoring up their currency artificially.

[flagged]

The problem is that it's hurting the USA economy, too.

In economics: if somebody is doing it cheaper then you can, especially if they are willing to lose money doing it (which is what subsidies accomplish), then you let them. You focus on what will make you money.

Which means for the national economy I have zero doubt that Trump's actions will save and/or create a 10-30 thousand jobs. The problem is that he will be sacrificing many more thousands of jobs and hurting the standard of living for most of the 300 million people living in the USA to do it.

Not to mention that USA debt from Trump/Congress's spending needs to be bought by somebody. The people that been doing that are the Chinese. So if he does manage to collapse their economy it's only shooting the Federal Government, and ultimately, the USA Dollar in the foot.

So much grandstanding. So little sense.

Re: U.S. Designates China as Currency Manipulator

#12

Post by ajross »

kasey_junk wrote: post #5

The best part of this is that they are being called a manipulator for not shoring up their currency artificially.

It's manipulation. The RMB has been artificially fixed for decades for targetted economic/political reasons. It's being adjusted now not so that it can seek to a market value but to target another specific value for political/economic reasons. No one argues this. The PRC manipulates it's currency. It always has. It certainly doesn't seem likely to stop.

That said: this is what trade wars look like, folks. If we didn't want to fight in one we shouldn't have started it. The currency-manipulated status quo of the past two decades or so has lifted hundreds of millions of people out of poverty and made the world richer than it ever has been.

But no, someone's gotta score domestic political points based on a poor understanding of economics and some intuition about how to make a good populist argument.

Re: U.S. Designates China as Currency Manipulator

#13

Post by dmoy »

SeanLuke wrote: post #7
lazyguy wrote: post #2

Kettle calling the pot black.

How so?

Every country manipulates its own currency, to some degree. It is sort of the point of having a federal bank. It is useful for the prices of things to not change drastically day to day.

That said - the degree to which the US Fed does things is different.

Re: U.S. Designates China as Currency Manipulator

#14

Post by ars »

kasey_junk wrote: post #5

The best part of this is that they are being called a manipulator for not shoring up their currency artificially.

That's reversed. They artificially weaken their currency, and recently weakened it even more.

Your sentence assumes their currency should be low, and they raise it, but evidence is the other way around.

Re: U.S. Designates China as Currency Manipulator

#17

Post by seanmcdirmid »

ajross wrote: post #12
kasey_junk wrote: post #5

The best part of this is that they are being called a manipulator for not shoring up their currency artificially.

It's manipulation. The RMB has been artificially fixed for decades for targetted economic/political reasons. It's being adjusted now not so that it can seek to a market value but to target another specific value for political/economic reasons. No one argues this. The PRC manipulates it's currency. It always has. It certainly doesn't seem likely to stop. That said: this is what trade wars look like, folks. If we didn'…

If the RMB was left to find a market value, it would fall way below 7 to probably 7.5 or even 8 something. Yes, it is being manipulated, but in the other way that Trump says it is. The Chinese are simply running out of the dollars needed to keep manipulating it so that it stays stronger than 7!

The simple irony is that if the Chinese were just to give up manipulating the RMB all together, Trump would be even more angry.

Everyone manipulated, the Japanese and Koreans do it, even the Swiss do it. The only thing that the Chinese do differently is have non market exchanges and currency controls on convertibility. (And their central bank is much less independent than the fed).

Re: U.S. Designates China as Currency Manipulator

#18

Post by kasey_junk »

ajross wrote: post #12
kasey_junk wrote: post #5

The best part of this is that they are being called a manipulator for not shoring up their currency artificially.

It's manipulation. The RMB has been artificially fixed for decades for targetted economic/political reasons. It's being adjusted now not so that it can seek to a market value but to target another specific value for political/economic reasons. No one argues this. The PRC manipulates it's currency. It always has. It certainly doesn't seem likely to stop. That said: this is what trade wars look like, folks. If we didn'…

Oh, that China engages in currency manipulation is not really up for debate.

What I find humorous is that this particular move seems to be driving the currency closer to the consensus opinion on where it should be.

Re: U.S. Designates China as Currency Manipulator

#19

Post by internet_user »

gopher2 wrote: post #9

Now what? Is there a legal designation or meaning to currency-manipulator I'm unaware of, or is this basically like the Chinese designating Trump a "name-caller."

"The three assessment criteria are: “(1) a significant bilateral trade surplus with the United States is one that is at least $20 billion; (2) a material current account surplus is one that is at least 3 percent of gross domestic product (GDP); and (3) persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly and total at least 2 percent of an economy’s GDP over a 12-month period.”[1]

https://en.wikipedia.org/wiki/Currency_manipulator

Re: U.S. Designates China as Currency Manipulator

#20

Post by Mirioron »

dmoy wrote: post #13
SeanLuke wrote: post #7

Earlier quoted context omitted.

How so?

Every country manipulates its own currency, to some degree. It is sort of the point of having a federal bank. It is useful for the prices of things to not change drastically day to day. That said - the degree to which the US Fed does things is different.

To clarify: by "federal bank" the parent means "central bank".
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