Saturday, Jan 24, 2009
Currency Wars
Reuters: China hits back at U.S. in currency row
China's central bank on Saturday said U.S. accusations that it was manipulating the yuan currency were misleading, a day after Beijing cautioned incoming Secretary of State Hillary Clinton to handle their ties with care.
The remarks from Su Ning, a vice governor of the People's Bank of China, were the bank's first public reaction to comments from U.S. Treasury Secretary-designate Timothy Geithner, who said this week that Beijing was manipulating its currency exchange policies to gain an unfair trade advantage.
Posted by plato @ 04:59 PM (652 views) Add Comment
11 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Crunchy said...
Talking of manipulation, what's the betting that gold goes down this week?
Now trading @ $900.
2. troy said...
all currency is manipulated
Writing in the 1930’s, C.H. Douglas observed: “It cannot have escaped the observation of anyone interested in the welfare and orderly progress of society that, more especially in the years which have intervened since the close of the European War and the present time, the centre of gravity of world affairs has shifted from Parliaments and Embassies to Bank Parlours and Board Rooms.
It is probable that this shifting is more apparent than real; that, in fact, Parliaments and Embassies have not for a long time been more than the salesmen of policies which were manufactured elsewhere. But the public is becoming increasingly dissatisfied with the goods; it has changed the window-dressers with disappointing results, and in consequence it is, perhaps for the first time, beginning to take an interest in matters of economics and finance which previously it had been content to leave to experts.
Shortly after this statement he left the North Sea coast of Northumberland in an old submarine headed for the Greek islands with a load of toxic debt and was never seen again. (from a dubious source)
3. troy said...
Moreover, C.H. Douglas clarified a realistic and viable course for a sane humanity to follow when he stated: “It is suggested that the primary requisite is to obtain in the re-adjustment of the economic and political structure such control of initiative that by its exercise every individual can avail himself of the benefits of science and mechanism; that by their aid he is placed in such a position of advantage, that in common with his fellows he can choose, within increasing freedom and complete independence, whether he will or will not assist in any project which may be placed before him.” (Economic Democracy - 1920).
4. stillthinking said...
Trade barriers and currency controls. But it isn't the yuan that is undervalued, it is the restrictions on the average Chinese citizen to spend their money, which they have earnt after all, which is the problem. Perhaps this will change if China manages to turn at the last moment and stimulate internal demand which they should have done years ago. They just hung on too long to the export boost.
Where does that leave the UK? What will the Chinese buy from the UK?
5. troy said...
doesn't even have to be internal
mediterranean - middle earth
NATO countries
Pacific rim
6. plato said...
stillthinking....... do you think the Chinese could spend some of their dollars and import more from the West to stimulate internal demand or is that too simplistic?
7. troy said...
plato ~~~ other than raw materials (empty plastic bottles) for Chinese products what have we got to sell them?
8. stillthinking said...
plato,
I wonder given the disastrous outcome, if there ever was a successful plan that went wrong, and if there was one, it must have been to give China time to build up a domestic consumption base. When they managed to surf that wave then global demand would naturally have increased and increased substantially. Where it went wrong, and why I think there were the beginnings of complaints against the Chinese over the last few years is that the Chinese held on too long, and given the flood of funded cheap goods there was no real imperative for the Americans to change anything.
Demand has to come from somewhere for a recovery, and China looks like the most likely candidate. I think that the UK, has became a shop with only a few lines of goods, but there is something to sell, even if its just tourism or cheese. Even investment is essentially buying something from the UK. The problem basically is that the Chinese government were never thinking about wealth in the same way that western leaders were. For example, the Japanese business leaders often have a very small multiple of the average company salary, but don't be fooled. They have access to unquestioned expense accounts and being in charge in Japan is richly rewarded, you are literally in charge of your employees pretty much inside and outside the company. So they -do- not operate solely on a getting wealthy basis. We do.
For the Chinese, it isn't just demand for western goods, they also haven't even been able to buy Chinese goods ....Hence the disaster now, because there surely is enough demand within China to take over, given a billion people (more than the US, Europe, UK and Japan together) but their policies have moved the Chinese mindset towards saving instead.
But basically yes, the trade imbalances have to go down, and for that to happen, demand must go up in China and Japan, where demand is currently collapsing...and further this has to happen gradually, there is too much inflation waiting in the wings. Perhaps should we move on to outright monetary deflation then this problem will disappear (as the government accepts defaults and lets savings vanish). I think that the NICE decade was a scam, and really should trade imbalances run down and internal demand pick up also, then the UK will have a serious inflation problem. So things have really moved too far now and demand is running down, down and down.
9. plato said...
stillthinking.........
Thanks (actually just logged on myself.I'm 2 hours ahead here). Yes there is a great difference in our mentalities and habits(East & West). The effect on economics is just as profound and I wonder if this is actually more likely to cause protectionism and even conflict rather than cooperation in the longrun. It's ironic now that we now have to become the producers and they the spenders and users, which really isn't going to happen given our psychologies. As you say (and I agree) things have really moved too far.
troy........
That's the basis of the argument but I think there are several fronts on which we could export as stillthinking suggests and in no small manner. Actually taking advantage of our cultural differences. However that requires good leadership and direction,so in this regard you have a very strong point.
10. Troy said...
are we not ignoring the environmental and sustainability issues here?
Only one earth and all that stuff!
I remember back in the hot headed 'ECO' days of late 1970s seeing the 'equality' thing explode in my face.
It seemed obvious then that we in europe would never achieve the materialistic standards of the USA and likewise the 'third' world would never attain our levels of comfort. At least not with the dominant mindset and population levels.
There's always another side to the coin, like womens' lib putting more cars on the road (?)
The transfer of wealth and power from 1st world (middle earth) to 2nd world (Europe and USA ) and then to the Pacific Rim has been talked about for many years, it seems to be part of a plan. Just hard to bare if you're loosing out as a result.
11. troy said...
are we not forgetting the environmental / sustainability issues here?
Only one earth stuff!
I remember in the heady days of the late 1970s seeing the equality myth come up and smack me in the face.
It was obvious then that we in europe would never achieve the material standard of living of the USA and likewise the 3rd world would not acquire our degree of creature comfort, at least not given the prevailing mindset and population levels.
There is always another side to the coin, like womens' lib putting more cars on the road and pollution in the air (?)
The transfer of wealth and power from 1st world (middle earth) to 2nd world (essentially NATO) and then to the pacific rim has been talked about for years.
(version 2, sent version 1 without password I think)