China Currency Manipulation: Careful What You Wish For

Wednesday, March 24, 2010 , , , , 3 Comments

Pic credit: Colchu.com

Careful what you wish for, Chuck Schumer, you're treading a very dangerous line and I'm not quite sure you want to bite the hand that feeds you. Oh sorry, make that the hand that used to feed you before China got smart and decided it would go foam up its bubble all on its own over there.

Reuters:

Two U.S. senators vowed on Tuesday to push for action on a bill aimed at pressuring China to strengthen its currency on the eve of a senior Chinese official's visit to Washington to smooth differences.

Arguing that China's exchange rate policies cost American jobs, the lawmakers said such pressure was necessary to make China move.

"My belief is that China will not do anything unless they're required to, and every day we wait is a day we lose wealth, we lose economic advantage, we lose jobs," said Senator Charles Schumer, a New York Democrat.


Schumer told reporters on conference call that he and Senator Lindsey Graham, a South Carolina Republican, would push for a vote on the bill by the end of May. The measure would allow U.S. companies to seek duties on Chinese goods to offset China's currency policies.

"If we took the currency issue off the table, we would be more competitive in every sector," added Graham.

Yo, Lindsey, it's not your table dude.

Here's a novel idea for the honorable (?!) Mssrs. Schumer and Graham: they have the fucking Fed to babysit and have failed miserably at taming that particular beast. They'd be wise to tend to their own house before they go judging their new Asian neighbors for having cheap furniture if you know what I'm sayin.

In honor of this large oversight on the part of Congress (you know, forgetting that it's their job to keep the Fed on a short leash), I resurrect Eliot Spitzer: The Fed is a Ponzi Scheme.





Yeah, the timing is pretty perfect.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.

3 comments:

Bob said...

Drop the useless fear mongering. If China dumps our debt they'd be shooting themselves in the foot, since such a move would devalue the worth of the debt they hold. China is a trade cheat, this is one thing I agree with Schumer and Levin on. I'd rather have the jobs in the US China has stolen by gaming the system than "cheap furniture."

Bob,

I'm curious how you believe China "stole jobs" when it was US businesses that decided it would be cheaper to outsource jobs that Americans didn't want anyway to China. They didn't force us to adopt that business model, nor did they force us to buy their crap that we now have homes full of with nothing to show for it. We at least have freedom of choice here at home and we chose.

China has its own issues and certainly plays dirty but the point of this post was that we should seriously consider getting our own house in order above all else.

If we are in a race to devalue the dollar, why does China care if they get to devalue it first?

We didn't seem to care much about China manipulating their currency when they were loading up on Treasurys, did we?

Anonymous said...

http://www.brownshoe.com/news/news_financial.asp?UNID=533642E0C5CD637386256E150046FA6D

Go to the second to last paragraph. Brown used to make many of their shoes in small cities throughout Missouri. The people who worked on the floor there didn't ask to have their factories closed. The company continued to charge the same price (or more) even though they figured out a way to have the shoes made overseas and then imported back to the US for sale. Their profit margins went up. A hefty tarriff on imported shoes at the onset of the trend might have been able to stop the bleeding. Today, we'd probably have to retrain a whole new set of hands for the purpose of doing something as fundamental as making our own shoes if push came to shove. And no, I don't blame a Chinaman (or any other nationality) needing a job - he was just looking out for his own interest. But I don't live in China and I don't share the same state. The guy who was busy making shoes in Missouri all day might well be busy making meth now that his job is gone. Idle minds are the devil's workshop.