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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

#141

Post by NTDF9 »

thephyber wrote: post #70
NTDF9 wrote: post #46

This is just nonsense. All central banks "manipulate" their currencies. The FED did that by printing trillions in QE. The FED did that in 1973 when they went off the gold standard. The FED did that in 1935 when they changed the value of the dollar. Funnily enough, the only way other major currencies can stop depreciation is by having more dollars. The way to do that would be more exports. But trade-warrer-in-chief ju…

> So Trump is the manipulator, not China? "currency manipulator" is a legal designation, not just an insult. It has 3 requirements (someone linked to the Wiki in another thread). I'm pretty sure Trump wants to weaken the USD to increase US manufacturing and make our exports more competitive with the world, but I don't see that he has a plan to do it. He seems to be grabbing for any kind of leverage he can get to bull…

> It's just giving false hope to US industries which no longer have a competitive advantage in the world market... long enough to last through the next presidential election.

I can see that. He doesn't care what really happens in the world as long as he can win the election.

Re: U.S. Designates China as Currency Manipulator

#142

Post by opportune »

tunesmith wrote: post #129
opportune wrote: post #124

Earlier quoted context omitted.

Nope because the Federal Reserve can issue new Federal Reserve notes (aka money) to the US Government to buy their bonds at any price point. As the other commenter pointed out this would cause inflation (as it increases the money supply)

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

Re: U.S. Designates China as Currency Manipulator

#143

Post by seanmcdirmid »

chrisjc wrote: post #112
realmod wrote: post #105

Earlier quoted context omitted.

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

Interesting. What changed in 1994?

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 department store...it would have been cool to visit China before 1994.

Re: U.S. Designates China as Currency Manipulator

#144

Post by [deleted] »

rolltiide wrote: post #43
rdtsc wrote: post #32

I 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…

[deleted]

Re: U.S. Designates China as Currency Manipulator

#145

Post by rossdavidh »

realmod wrote: post #105
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

How did I miss that? Interesting. So, that makes today's announcement still significant, but not unprecedented. We will see if the response is similar to last time.

Re: U.S. Designates China as Currency Manipulator

#146

Post by wczin »

rolltiide wrote: post #43
rdtsc wrote: post #32

I 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…

>Germany can't manipulate its currency as they don't have their own, they use the Euro.

And who owns the Euro? Let me tell you, it's not the poor countries of the EU.

Re: U.S. Designates China as Currency Manipulator

#147

Post by AnthonyMouse »

oska wrote: post #137
_ptgt wrote: post #79

Earlier 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.

> The USD has risen against pretty much every major currency in the past several years. And would have risen more without QE.

> And would have risen more without QE.

And risen even more than that if they had started destroying currency. But the usual target for a currency is value stability with other major currencies, and "devaluation" means that its value goes down compared to most other currencies.

It's completely normal (and basically required to prevent deflation) to create some new currency during normal (i.e. growth) times to provide more currency to use for the increasing number of transactions.

Re: U.S. Designates China as Currency Manipulator

#148

Post by chiefalchemist »

tenpies wrote: post #104
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.

> 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…

> "...but only one of them would see its financial system collapse."

Unless that is an absolute certainty then and this is a game of high stakes chicken, then I would say the USA has more to lose.

While China has certainly developed in the last couple decades they are still relatively used to living with less. On the other hand, Ameicans lose their minds when Facebook goes down for an hour.

That is, there would be bedlam in the USA. China much less so.

Re: U.S. Designates China as Currency Manipulator

#149

Post by bodyfour »

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.

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

Re: U.S. Designates China as Currency Manipulator

#150

Post by seanmcdirmid »

oska wrote: post #137
_ptgt wrote: post #79

Earlier 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.

> The USD has risen against pretty much every major currency in the past several years. And would have risen more without QE.

Well, America’s QE caused everyone else to do QE as well. The RMB because stronger in that period because China was less interested in doing QE at the time.
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