It means the Trump family will make a bunch of money on the volatility, and the US will capitulate in a few months.
U.S. Designates China as Currency Manipulator
151–160 of 356 posts
Re: U.S. Designates China as Currency Manipulator
#152I have no idea what all this means so tried to read https://en.wikipedia.org/wiki/Currency_manipulator . Found it interesting that "Switzerland have been manipulating their currency more than China since 2009 and Germany and South Korea since 2014" Still it is not clear what that means in terms next steps. Will there be more tariff increases or sanctions? And then China will devalue their currency even more. So where…
Okay, no, Germany can't manipulate its currency as they don't have their own, they use the Euro. Germany does have large influence over Brussels being the economic powerhouse of the Eurozone currency union, and the European Central Bank is in Frankfurt but really accountable to no-one, being led by an Italian man from Goldman Sachs. And yes, these 'currency manipulator' designations are a point of political convenien…
I don't know how much influence Germany really has with the negative interest rate that's screwing them more than anyone else in EU.
Re: U.S. Designates China as Currency Manipulator
#153Earlier quoted context omitted.
I see. Printing money to buy new financial assets would also cause greater wealth inequality and populism, although maybe those are seen as benefits to the current administration.
I could be wrong but I don't think buying US treasuries would directly increase wealth inequality, since the money is being used to fund the US government. If the Fed bought other more private assets off the market (which I believe it does) then yes it could increase wealth inequality
Possibly, I may be confused between simply buying treasuries, and quantitative easing. Still learning!
Re: U.S. Designates China as Currency Manipulator
#154Earlier quoted context omitted.
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?
I don’t understand this argument.
Can’t the Chinese buy a LOT of influence, real estate, and US properties with all the dollars? Why is printing money “free”?
How is this not either hyperinflation on one end or just regular currency value on the other. On one end it hurts the issuing country, on the other it’s mutually beneficial. How does printed-paper for goods fit into that spectrum.
I truly can’t wrap my head around this argument: been on the back of my head since I heard I think Peter Thiel say it (iirc.)
Re: U.S. Designates China as Currency Manipulator
#155I have no idea what all this means so tried to read https://en.wikipedia.org/wiki/Currency_manipulator . Found it interesting that "Switzerland have been manipulating their currency more than China since 2009 and Germany and South Korea since 2014" Still it is not clear what that means in terms next steps. Will there be more tariff increases or sanctions? And then China will devalue their currency even more. So where…
IIRC Japan does this as well
Re: U.S. Designates China as Currency Manipulator
#156Earlier quoted context omitted.
US can barely put sanctions on Iran as of now and the rest of the world is hesitant to follow. It took ~8 years to get the sanctions on Iran to that point. Even if US wanted to go nuclear and push for China being cut from SWIFT: 1. It will be suicide. Cutting China from SWIFT will have very very big impact in the US. 2. US corporations have too much interest to lose in here. No way corporate America allows that to ha…
> US can barely put sanctions on Iran as of now and the rest of the world is hesitant to follow. The US has crushed the Iranian economy. What are you talking about? Have you seen the collapse of their economy since the US left the nuclear deal and began pursuing sanctions? Have you seen the extreme inflation rate, the plunge in their currency, the plunge in their oil exports, and their increasingly wild behavior? If…
I am Iranian and I follow the news very very closely. I have family and friends in Iran.
You are right. The Iranian economy is crushed and basically the country is starving.
Here's what happened (oversimplified of course):
1. US has had sanctions on Iran for a long time (> 3 decades). No US entity can deal with Iran.
2. Obama extended these sanctions to the world: No entity form any country is allowed to work with Iran. If they do, they cannot work with the U.S.
3. Europe was happy with those sanctions and pushed for it.
4. JCPOA (Iran Deal) was signed.
5. Iran stopped nuclear activities.
6. US got out of the deal and push-forced everyone else out
7. The rest of the world, being powerless and bullied, bowed to it, but Europe, UK, China, Turkey and Japan have all been vocal in supporting Iran now. They even have exemptions from the sanctions to work with Iran.
8. Europe even has been working on a back-channel [0] (with no success though) to trade with Iran.
It is true that sanctions are crushing Iran but that's due to years of pressure that was already built-up during Obama era where the Europe and rest of the world did agree upon that.
US cannot cut China from world trade overnight without the support from rest of the world.
[0] https://en.wikipedia.org/wiki/Instrument_in_Support_of_Trade...
Re: U.S. Designates China as Currency Manipulator
#157China have been manipulating their currency before this week's drop. They use USD to buy CNY to prop up CNY exchange rate. If they stop buying CNY using USD, the value of CNY would fall (happening now). So China is technically no longer manipulating their currency. Why are they doing this? My guess is to respond to trade war tariff. The US is manipulating USD through Fed interest rate. The Fed lowers interest rate to…
(Don’t reply to temp comments because then I can’t delete them!)
Re: U.S. Designates China as Currency Manipulator
#158Yes 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…
Bush intentionally weakened the dollar in 2001 to boost export sales. Nobody batted an eye then.
Re: U.S. Designates China as Currency Manipulator
#159Earlier quoted context omitted.
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.
Yes, but the pressure to pay off those bonds would be deflationary, so in order to sustain the inflation next the Fed would have to do something even more extraordinary! AFAIK this policy pathway leads ultimately to bond forgivenesses (or funky bankruptcies) that eliminate deflationary pressure but may well have the unpleasant side effect of radically adjusting the fiat currency system.
Re: U.S. Designates China as Currency Manipulator
#160One thing that I think is getting lost in this discussion is the role of intent on currency manipulation.
Switzerland has the strongest currency in the world due to the country's reputation for governmental and financial stability. This makes Swiss labor extremely expensive for reasons mostly outside of their control, and the Swiss government has tried (and largely failed) to remedy this. Technically, this is devaluation but given the circumstances and Switzerland's relatively small footprint in the labor market, it's understandable and fairly benign.
The Fed cutting interest rates in 2009 had the effect of weakening the USD relative to what it would have been. But the intent of the policy was not to steal a share of the export market, but rather to provide stimulus during a deep recession.
Japan has been in ultra-low growth and ultra-low inflation for decades. To fend off the threat of deflation and economic contraction, it ran the printing press and cut interest rates. Which, again, devalue the currency but stealing export share is not a major intent.
I'm not sure what the appropriate definition of "currency manipulator" should be but, while China's currency policy history is a strange and variable beast, yesterday's devaluation was clearly a different case than those above. And depending on how far you want to go back in history, there's an argument that the intent of some previous Chinese devaluations were aimed primarily at increasing its relative attractiveness as an exporter.
Its most recent history until yesterday was to prop up the RMB, so it may be fair to argue that now is a strange time to label them a currency manipulator. Given yesterday's events and their history in this area though, it's hard to make the claim that their currency policy is altogether ordinary either.