China Continues to Manipulate the United States
Tuesday, 18 Jan 2011 03:11 PM
By David Frazier China’s president, Hu Jintao, stated this past weekend that
the international flexible exchange-rate financial system is
unfair and a “product of the past,” and that actions taken by
the U.S. Federal Reserve have led to rising inflation rates in
China. In truth, China is very happy that the exchange-value of the U.S. dollar has trended lower since the beginning of 2002. That’s because the decline in the dollar has been accompanied by a corresponding decline in the exchange-value of the Chinese yuan, which has ensured that consumers around the world have continued to increase their demand for inexpensive Chinese products and services. If, on the other hand, China had let market forces determine the value of its currency, there’s a good chance that the yuan would have appreciated during the past couple of years, that the prices of Chinese goods and services outside of China would therefore have risen, and that China’s exports would have likely declined. Unfortunately, no one in our government has been willing to stand up to the Chinese by suggesting actions that would force China to un-peg its currency to the U.S. dollar. I say enough is enough, and I suggest for everyone who reads this article to write to and phone your congressional representatives today – yes, today – and to insist that those so-called “representatives” take action immediately to force the Chinese government to stop manipulating the United States. An example of the type of action that I’m suggesting would be for Congress to implement laws that would likely cause the prices of Chinese goods to rise if China doesn't let market forces determine the value of its currency. Specifically, I’m suggesting that Congress should enact tariffs on imports from China until China lets its currency float freely in the financial markets. Although such an action would likely lead to a trade war with China, my research suggests that China has a lot more to lose than the United States by the imposition of tariffs. About the Author: David Frazier David Frazier is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He also writes two very successful investment newsletters. Discover more by Clicking Here Now. © Moneynews. All rights reserved. |