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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

#101

Post by tunesmith »

internet_user wrote: post #87
havetocharge wrote: post #78

Earlier quoted context omitted.

US decoupling itself from China would have an avalanche of effects, including huge inflation on most consumer goods, and outright product shortages. China is also a huge foreign debt holder, and if presumably no longer a buyer due to decoupling, will send US interest rates skyrocketing.

The fed has unlimited control over the rates. They could literally just buy out every bond in existence.

I don't see how that works. If the US Government has to sell bonds to borrow money to finance the deficit, and buyers start disappearing, they have to raise interest rates to make the bonds more attractive to the remaining buyers, don't they?

Re: U.S. Designates China as Currency Manipulator

#102

Post by mc32 »

devoply wrote: post #42

Yes considering the US prints hand over fists amounts of money to deal with its economic woes, it's sort of a joke where the emperor wears no clothes, but no one says anything because he's the emperor. https://www.investopedia.com/articles/investing/090915/quant... > "In theory, currency manipulation and a monetary policy like quantitative easing aren't the same thing. One is interest rate policy based and the other…

There is a spectrum from the likes of Venezuela and previously Zimbabwe (who manipulated currency at will and let’s say Gold on the other hand. Manipulator depends on how far down the spectrum you operate in compared to others.

Re: U.S. Designates China as Currency Manipulator

#103

Post by addicted »

landryraccoon wrote: post #93
internet_user wrote: post #38

It ends with China being cut off from SWIFT and correspondent banking. That would probably make them re-think their approach to economic warfare.

Why would Europe or the rest of the world go along with this? SWIFT becomes irrelevant if this happens, not China.

The EU is looking to build alternative currency mechanisms for Iran.

If China is cut off from any global trade structures, I can’t imagine any non US countries would go along with it.

The other reason for this is that all the US allies that could possibly have worked with the US on this are all under threats of tariffs from the US themselves.

Re: U.S. Designates China as Currency Manipulator

#104

Post by tenpies »

havetocharge wrote: post #78
rossdavidh wrote: post #67

So, really, is there any doubt that this is true? China's currency exchange rate has been abnormally stable for a long time, and the Obama, Bush, Clinton, Bush, and Reagan administrations all knew it was the result of currency manipuliation. They just found it politically unpalatable to admit it out loud. The real question would be, why is the U.S. finally admitting this out loud? 1) amping up a trade war 2) decoupli…

US decoupling itself from China would have an avalanche of effects, including huge inflation on most consumer goods, and outright product shortages. China is also a huge foreign debt holder, and if presumably no longer a buyer due to decoupling, will send US interest rates skyrocketing.

> China is also a huge foreign debt holder, and if presumably no longer a buyer due to decoupling, will send US interest rates skyrocketing.

Before that happens, the capital exodus demanding to liquidate their Yuan for USD would have burned through the country's USD reserves and they would be insolvent. This is quite similar to what happened in South Korea in 1997 and it took IMF intervention to stabilize the country. The PBOC could limit how much a person can sell, but this would crash their currency (e.g. Venezuela) almost instantly.

As much as people want to hate on Trump and/or the US, China is in a weaker position here. Don't get me wrong, both countries suffer, but only one of them would see its financial system collapse.

Re: U.S. Designates China as Currency Manipulator

#105

Post by realmod »

rossdavidh wrote: post #67

So, really, is there any doubt that this is true? China's currency exchange rate has been abnormally stable for a long time, and the Obama, Bush, Clinton, Bush, and Reagan administrations all knew it was the result of currency manipuliation. They just found it politically unpalatable to admit it out loud. The real question would be, why is the U.S. finally admitting this out loud? 1) amping up a trade war 2) decoupli…

Actually China was designated currency manipulators by Clinton from 1992 to 1994

Re: U.S. Designates China as Currency Manipulator

#106

Post by wrong_variable »

internet_user wrote: post #87
havetocharge wrote: post #78

Earlier quoted context omitted.

US decoupling itself from China would have an avalanche of effects, including huge inflation on most consumer goods, and outright product shortages. China is also a huge foreign debt holder, and if presumably no longer a buyer due to decoupling, will send US interest rates skyrocketing.

The fed has unlimited control over the rates. They could literally just buy out every bond in existence.

Products don't grow on trees.

If the fed buys every USD bond in existence ( aka monetize the debt ) - it would lead to a good amount of inflation.

Re: U.S. Designates China as Currency Manipulator

#107

Post by markvdb »

3% stock market movements set in motion by the US president alone. "Great" insider trading potential. Have someone set up the right derivatives strategy and bam: instant millions.

I couldn't convince myself to immediately write that idea off as utter nonsense.

Anyone with more relevant financial experience? Can you reassure me this would be difficult to pull off? Or would you have to confirm this would be difficult to catch?

EDIT: Let me try put this in an even more neutral way. Let's say one knew down to the minute when the entire US and EU stock markets were going to sustain substantial losses. How much value one could siphon off without triggering too much suspicion? Surely market depth and trade volume must offer at least order of magnitude hints about that?

Re: U.S. Designates China as Currency Manipulator

#108

Post by tunesmith »

codingslave wrote: post #89

The long story to this is that the Chinese dont like what Trump is doing, he is the first to stand up to their tactics. The thing is, if Trump doesn't get reelected, a democratic candidate will most likely not continue the trade war. China has every incentive to place pressure on the us stock market in the hope that it ruins Trumps chances at reelection. So they play this long waiting game, in the chance that Trump d…

From that perspective, what is arguably good about this trade war continuing?

Re: U.S. Designates China as Currency Manipulator

#109

Post by bilbo0s »

codingslave wrote: post #89

The long story to this is that the Chinese dont like what Trump is doing, he is the first to stand up to their tactics. The thing is, if Trump doesn't get reelected, a democratic candidate will most likely not continue the trade war. China has every incentive to place pressure on the us stock market in the hope that it ruins Trumps chances at reelection. So they play this long waiting game, in the chance that Trump d…

Not sure there will still be a trade war during the election. The world is no longer composed of warehouse economies that can hold out indefinitely in the face of war, disease, sanctions, etc, come what may. Either China will give, we will give, or China and the US will go their separate ways. Way too risky for the Chinese to try to bank on a new president, or a new president after that, or etc etc etc. See sawing back and forth between normal trade and no trade and never knowing where you're gonna stand in 4 years.

Better for them, game theoretically, to do exactly what they're doing. Either bring Trump to the table, or fail and look to their own markets.

Re: U.S. Designates China as Currency Manipulator

#110

Post by mars4rp »

_ptgt wrote: post #79
devoply wrote: post #42

Yes considering the US prints hand over fists amounts of money to deal with its economic woes, it's sort of a joke where the emperor wears no clothes, but no one says anything because he's the emperor. https://www.investopedia.com/articles/investing/090915/quant... > "In theory, currency manipulation and a monetary policy like quantitative easing aren't the same thing. One is interest rate policy based and the other…

The USD has risen against pretty much every major currency in the past several years. Its status as the world reserve currency keeps its value artificially high despite running the printing press. Whether this is good or bad for the US economy is debatable (and unclear), but it's not really a recipe for currency manipulation at all. I have no idea what you're talking about.

is it really debatable? how could giving China printed paper for their goods be bad for US economy?
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