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U.S. Designates China as Currency Manipulator

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Re: U.S. Designates China as Currency Manipulator

#191

Post by Fjolsvith »

Aperocky wrote: post #185
seibelj wrote: post #176

Earlier quoted context omitted.

America has free markets and a decentralized, bottom-up system that results in entrepreneurs and private entities deciding how to allocate capital. There may be temporary pain but wherever there is opportunity an entrepreneur will step in. China has zombie enterprises, their financial statements are lies, and cities built by bureaucratic maneuvering over market need. I will always bet on the American private sector o…

And of course all the product you bought that were made in China are lies, they don't exist at all. And obviously America will be able to make these products despite having about 0 unemployment, but hey, magic happens here amiright?

> And obviously America will be able to make these products despite having about 0 unemployment

That's what's called entrepreneurship. People will get rich making these products that are in sudden demand.

Re: U.S. Designates China as Currency Manipulator

#192

Post by seanmcdirmid »

prawn wrote: post #174
seanmcdirmid wrote: post #143

Earlier quoted context omitted.

China reformed their currency. See the historical exchange rate for RMB: https://www.macrotrends.net/2575/us-dollar-yuan-exchange-rat... It went from 6 RMB/dollar to just less than 9 overnight. It was basically a crazy rate (no one would use that rate unless forced) before the reform. Before that there was even a dual system of foreigner money and local money, only foreigner yuan could be used at the friendship depar…

I visited in 1991 for three months as a 14 year old. I don't recall a dual system (unless it was voucher based?), but I remember the friendship department stores and loads of other interesting things - Russian-styled hotels in Xian, Pudong being basically farmland, snakeboats on the Huangpu, etc. It had changed a lot by the time I next visited in late 2003. I don't think they yet had a McDonalds, but there was a thre…

McDonald’s has been in China since the late 90s, there was even a couple of Starbucks when I visited in late 1999! 94 is sort of what I see as the cutoff between old and new China.

Re: U.S. Designates China as Currency Manipulator

#193

Post by AnthonyMouse »

drtillberg wrote: post #159
wrong_variable wrote: post #106

Earlier quoted context omitted.

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.

How do you mean? If the Fed creates new money and buys bonds with it, the Fed can continue to hold them forever (really just until they mature) if it wants to. Then the Fed is more or less part of the government, so when the bond matures the Fed takes the bond to the treasury which gives it cash, then it gives the cash back to the treasury. It's like the bond evaporates into nothing when it matures while the Fed is holding it.

If the Fed theoretically bought all the bonds then it could obviously no longer increase the money supply by buying bonds, but we're a long way from that, and even then the Fed could still create new money and give it directly to the treasury to spend in lieu of collecting taxes. Or in the utopia where buying all outstanding government debt and funding the entire federal budget out of new money still hasn't caused the desired amount of inflation, to use to enact a negative income tax.

Re: U.S. Designates China as Currency Manipulator

#194

Post by astronautjones »

busymom0 wrote: post #125
simonh wrote: post #82

Earlier quoted context omitted.

And if that was the real reason, you’d expect the US to be coordinating with other countries that have the same beef with China. Instead, the US is antagonising them as well. Trump has been very clear the tariffs are mainly about boosting US manufacturing. It’s not going to work, but that’s what he keeps saying. If it really was about the issues you list, there are plenty of ways to address them in a much more coordi…

> It’s not going to work, but that’s what he keeps saying. So far it has worked very well for the US and China has been suffering. US has been able to create 6 million jobs with 2 million manufacturing jobs alone created since his election. China has lost a lot of manufacturing jobs and a lot of manufacturers are moving away from China and either coming back to US or moving to places like India where IP theft isn't a…

> So far it has worked very well for the US and China has been suffering. US has been able to create 6 million jobs with 2 million manufacturing jobs alone created since his election.

this is nonsense. in what sectors?

Re: U.S. Designates China as Currency Manipulator

#195

Post by raincom »

wrong_variable wrote: post #106
internet_user wrote: post #87

Earlier 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 and no. Let me give you an example: if 70% of Americans get $40K bonus per annum from the fed, it will lead to inflation. However, if the same amount of money (70% of 300M times $40K =8.4T) is given to ten billionaires, it won't lead to inflation.

Re: U.S. Designates China as Currency Manipulator

#196

Post by sumedh »

busymom0 wrote: post #116
markvdb wrote: post #107

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 t…

Even IF this were the case, Insider trading has been allowed in congress for a long time. There was the STOCK act passed in 2012 to prevent it, the very next year it was amended to get rid of strict disclosure requirements. Nancy Pelosi for example (speaker of the democrat majority house) is worth 140 million dollars. One has to wonder how a life time politician has managed to get that much wealth.

Chris Collins would have been a better example instead of Pelosi.

Re: U.S. Designates China as Currency Manipulator

#197

Post by Fjolsvith »

bodyfour wrote: post #149
busymom0 wrote: post #116

Earlier quoted context omitted.

Even IF this were the case, Insider trading has been allowed in congress for a long time. There was the STOCK act passed in 2012 to prevent it, the very next year it was amended to get rid of strict disclosure requirements. Nancy Pelosi for example (speaker of the democrat majority house) is worth 140 million dollars. One has to wonder how a life time politician has managed to get that much wealth.

Speaker Pelosi married into money, so no need to "wonder" (or throw baseless allegations around)

She had some good book deals?

Re: U.S. Designates China as Currency Manipulator

#198

Post by mdorazio »

astronautjones wrote: post #188
Jorge1o1 wrote: post #29

Earlier quoted context omitted.

I think the trade balance is too skewed in favor of the US. It will be painful for both sides, but we have a lot more goods we can tariff than they can. Of course, they could also dump their US treasuries, but it would be a pyrrhic victory for China. They would hurt themselves too much in the process.

they can sell off more of the real estate they hoard and substantially effect that market again

I don't think that would work. There's a huge amount of pent-up demand in many markets for real estate, with buyers just waiting for prices to slightly drop. I'm pretty confident the amount of real estate held by China that they could force sale of would be snapped up by local markets without issue.

Re: U.S. Designates China as Currency Manipulator

#199

Post by tempsy »

_ptgt wrote: post #160

One 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 devalua…

Just saw from Bloomberg that China responded by strengthening the RMB to under 7. Futures seem to be responding positively...

Re: U.S. Designates China as Currency Manipulator

#200

Post by Phil_Latio »

jchb wrote: post #179
Phil_Latio wrote: post #97

Earlier quoted context omitted.

> Okay, no, Germany can't manipulate its currency as they don't have their own, they use the Euro. But they use the Euro as an umbrella that doesn't behave like a single currency for Germany would. While implementing the Euro they put massive pressure on wages while other EU countries kept increasing wages. Germany is violating export-surplus rules of the EU, but no one seems to care. https://upload.wikimedia.org/wik…

Actually the German surplus has been brought up for discussion many times in the EU parliament. A trade surplus of over 6% triggers a so called IDR, one EU acronym among many, which means (Macroeconomic) In-Depth Review. If the review shows an excessive balance, that triggers the EIP. Excessive Imbalance Procedure!. If a country fails to follow the recommendations coming out of the EIP, that can in theory lead to san…

> Actually the German surplus has been brought up for discussion many times in the EU parliament.

Has it? I don't follow that clown show. Looks like Germany has the power within the EU to ignore such issues while bullying other countries into following the rules "we all agreed on". Naturally this topic is a total taboo in Germany. The worst excuse I heard so far was: "Yes, we profit the most and other countries may suffer in economic terms. BUT the EU as a whole brought so much more to these countries!"

> This IDR concluded that a EIP was not necessary

I know that the rule itself is 6% for surplus and 4% for deficit (?!)... So thanks for the link but I won't read it, I don't care why EIP was not necessary for whatever opinion. I just don't take the EU serious.

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