Article

2006-02-20 China-Japan-Koreas

US moving closer to 'currency manipulator' status for China

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by lotp 2006-02-20 10:56|| || Front Page|| [11126 views since 2007-05-07] Top

#1 Also, Mr. Bernanke made clear he saw no quick fix to the U.S. deficits, saying it could take a decade to shrink them to more sustainable levels.

You'd be amazed at what your could accomplish if you really tried. Like start drilling yesterday in Alaska and off the coast of California and Florida, start building more capacity in refining, and tell Walmart et al that they'd better be generation a new source of cheap supply if they don't want to find themselves out of market chain when the hammer comes down on China. Its a matter of political will. Previous administrations and this one, don't have that.

Posted by Angaith Grerens9024 2006-02-20 16:29|| 2006-02-20 16:29|| Front Page Top

#2 Those need doing, but if the currency situation isn't addressed we will still have to deal with the huge dollar reserves China is holding. With the renimbi artificially low against the dollar, we are due to repay them a good deal of real economic value -- more than we got from them when they bought the bonds or accepted payment for goods.

That's the difficult balancing act facing the feds on this issue.

Posted by lotp 2006-02-20 16:38|| 2006-02-20 16:38|| Front Page Top

#3 Hold on a minute.

That wad of dollars China is holding is China's problem, not ours. If they start dumping dollars, that will drop the value of the dollar and the value of the whole stash. So they get to sit on thier pile of dollars.

What is really going on here is the power of monopsony. Yeah, the same game Wal*Mart plays. Since we're China's main customer, we're asking for a discount. No discount? No more purchases.

While these numbers are huge, lots of it flows right out of China because China is only performing the low value add final assembly. They have to pay someone else for the parts assembled. The higher value add work is being done elsewhere to design and make those parts.

Bottom line? China's getting the screws put to it.

Posted by Nimble Spemble 2006-02-20 17:11|| 2006-02-20 17:11|| Front Page Top

#4 Sure. But if the value of the dollar drops a lot, consumer purchasing power here in the States drops in an election year.

Posted by lotp 2006-02-20 17:13|| 2006-02-20 17:13|| Front Page Top

#5 Maybe we can sell them Rockefeller Center. We always make money on that deal. Or perhaps they'd like to invest in General Motors. I suppose they could just flush their dollars down a toilet but that sure would upset their bottom lines. Who knows? I'm still running a huge ass defecit with Publix, I can't figure out what to do except work and continue to make 20 times what I owe them. But hey.... who knows. I lived through 3 Great Depressions and Crashes. What was that suckers name? Some Indian gent. The Great Crash of INSERT YEAR HERE. However, I'm on the ground floor of peak oil and the coming era of low gravity.

Posted by 6 2006-02-20 17:17|| 2006-02-20 17:17|| Front Page Top

#6 "a visit to the U.S. in April by Chinese President Hu Jintao. The visit gives the Bush administration some leverage to extract concessions from Beijing, which will be anxious for Mr. Hu's trip to go as smoothly as possible."
I'm predicting an April no-show -- Mr. Hu isn't going to want photos with the guy who smacked Iran hard.

Posted by Darrell 2006-02-20 17:21|| 2006-02-20 17:21|| Front Page Top

#7 Lost me on the last half of that one, 6. Could you unpack that a little?

Posted by lotp 2006-02-20 17:22|| 2006-02-20 17:22|| Front Page Top

#8 Yeah, 6 was off to a great start before the booze started taking over.

Posted by Darrell 2006-02-20 17:24|| 2006-02-20 17:24|| Front Page Top

#9 era of low gravity? Why wasn't I told? Is this an O-Club exclusive? Guess I don't need to go on that diet now....

Posted by Frank G">Frank G 2006-02-20 17:30|| 2006-02-20 17:30|| Front Page Top

#10 Watch out for the heartburn, Frank.

Posted by Darrell 2006-02-20 17:32|| 2006-02-20 17:32|| Front Page Top

#11 It's almost too late for the value of the dollar to have a big impact on the election.

Besides, the effect of a shutoff of the American market would do a lot more damage to the Chinese regime than the American one. China is no economic powerhouse. It is just able to steal a little money from a whole lot of people. As opposed to America where the government steals a lot of money from everybody.

Posted by Nimble Spemble 2006-02-20 17:34|| 2006-02-20 17:34|| Front Page Top

#12 ;-)

Posted by lotp 2006-02-20 17:53|| 2006-02-20 17:53|| Front Page Top

#13 6 is saying that China's pile of greenbacks is their problem and that the usual economik fear mongers are at work. Buying things too cheap is not a problem for the consumer. That said, 6 is right on with the coming era of low gravity. The effects on just damn near everything will be profound. Drugs, guns and whiskey will be your friends and fishhooks.... don't forget fish hooks.

Posted by Yur Lokal Saltie 2006-02-20 18:23|| 2006-02-20 18:23|| Front Page Top

10:32 Anonymoose
23:59 Anon
23:54 Rafael
23:38 Alaska Paul
23:37 mag44_vaquero
23:30 DMFD
23:28 Zenster
23:24 .com
23:19 Frank G
23:16 Frank G
23:16 Jan
23:14 mom
23:13 .com
23:13 Frank G
23:12 Frank G
23:11 .com
23:10 Frank G
23:10 Rafael
23:09 Zenster
23:09 Jan
23:08 Frank G
23:04 Alaska Paul
23:00 Silentbrick
23:00 Alaska Paul