US declares China currency manipulator

[blueraincap]

Why the US should not conduct itself like a third world dictator? Well it does in many areas but it should not, after all it claims to be the leader of the free world that celebrates free markets. Can't have it both ways. Did that answer your rather simple question?

Also, you can't practically consistently intervene to weaken the USD given its special status (exorbitant privilege) and huge liquidity, unless the Fed lowers rates substantially which will be market driven. Intentional depreciation in a key world reserve currency will be a nightmare, worse than lehman death. They can however unilaterally target to strengthen the offshore rmb, which should strengthen onshore rmb. Can't weaken across the board without G10 holding hands and I doubt anyone would give a crap, IMF said a few weeks ago Rmb isn't undervalued. Btw, do you think the HK crisis is begetting capital flights in the offshore rmb? MXN dropped like a stone after Trump declared the Mexican tariffs and now Rmb dropping 1-2% making China a manipulator? I just found the Trump administration too emotional and unreliable these days for an economy of its size..

Is the SEC investigating Trump on his manipulative twitter use?

 

[GRULSTMRNN]

A tweeting president cannot talk down a currency, for that the currency market is way too liquid. The Fed can do that but until now we have witnessed that the Fed does not allow itself to be held hostage by a rogue president.

Also, you can't practically consistently intervene to weaken the USD given its special status (exorbitant privilege) and huge liquidity, unless the Fed lowers rates substantially which will be market driven. Intentional depreciation in a key world reserve currency will be a nightmare, worse than lehman death. They can however unilaterally target to strengthen the offshore rmb, which should strengthen onshore rmb. Can't weaken across the board without G10 holding hands and I doubt anyone would give a crap, IMF said a few weeks ago Rmb isn't undervalued. Btw, do you think the HK crisis is begetting capital flights in the offshore rmb? MXN dropped like a stone after Trump declared the Mexican tariffs and now Rmb dropping 1-2% making China a manipulator? I just found the Trump administration too emotional and unreliable these days for an economy of its size..

Is the SEC investigating Trump on his manipulative twitter use?

 

[blueraincap]

Putting myself in Chinese negotiators' shoes, I would wait til the election and get more clarity on whom to negotiate with. If Trump doesn't win and whoever else wins is a China hawk, at least I wouldn't face someone as unpredictable and Twitter-fancy as Trump

 

[GRULSTMRNN]

US companies cannot wait that long. They already face extreme pressure operating in China. That means enough might return to the US, enough firms for the Trump base to hold on to him. Fundentally, the US plays a weaker hand in this trade war than China: China can diversify its revenue generation away from the US. They are also becoming less dependant on the US for high tech manufacturing inputs. They happily trade with Europe and the rest of the world. However, without cheap Chinese imports the middle class in the US will get crushed big time. That means American middle class consumers will have to tighten the belt towards all other higher valued goods and services that are often American made, in order to afford now more expensive Chinese products or products made elsewhere but which are more expensive. This is how I believe this will play out medium to long term. Americans cannot tolerate playing second rank, "only", hence any future agreement between the US and China will be merely cosmetic in nature.

Putting myself in Chinese negotiators' shoes, I would wait til the election and get more clarity on whom to negotiate with. If Trump doesn't win and whoever else wins is a China hawk, at least I wouldn't face someone as unpredictable and Twitter-fancy as Trump

 

[Sig]

This is on the topic of currency manipulation. Again please show a detailed example where and how the US manipulates the US dollar. You made up the claim so I just like some factual backup.

To be fair, changing your interest rates directly changes spot and futures rates compared to all other currencies, it's a purely mechanical relationship. So every time the fed changes interest rates they're manipulating the USD rates. And while fighting a trade war or specifically devaluing the dollar isn't their primary goal when changing rates, they're fully aware of the impacts it will have in those areas, among others, and take that into account when making their decision. I'm sure we could find some old fed minutes where balance of trade was discussed vis-a-vis rates. Obviously you and I who are into the minutia of this would say it's different then the Chinese govt doing it, but from their perspective and that of most of the world including most Americans who don't understand our financial system...it's pretty much the same.

 

[apdxyk]

However, without cheap Chinese imports the middle class in the US will get crushed big time.

I don't buy this

 

[Overnight]

I don't buy this

If you stopped all Chinese imports now, everyone would get crushed. Rich, poor, and middle-class.

Because most of the items we consume and whose prices we are used to paying, are made in China.

Here is an experiment you can try. Look at every item you have in your home. Check the "Made in" tags.

List how many are made in China vs all the other stuff you have.

 

[blueraincap]

I don't buy this

I think it is a fact of life in many countries these days, not just the US. From your Nike sneakers to your hippy hats

 

[apdxyk]

The Core products I pay everyday for are housing, food and energy. I don't buy 'goods' of other sort daily.
Besides, substitute "working class" by "middle class" and back and you will see the origines of Comintern agitprop in the generalization.
Do you have the numbers? Sources? Baskets with item by item for a given stratum of the fictitious Middle Class?

It's like the "China can turn inwards" argument while we belong to this "complex interdependent world". I'd like to see when American companies will finally start being competitive again.

 

[comagnum]

Speaking of currency manipulation - the U.S. Fed has 100 years of experience manipulating the USD. Trump calling China a currency manipulator shows his extreme ignorance and blatant racism.

Greenspan published his views on 2010, Oct. 11 in the Financial Times.

"Former Federal Reserve chairman Alan Greenspan says both the United States and China are pursuing a policy of weakening their currencies to the detriment of other economies."