Tuesday, October 04, 2011

The current currency wars and Republican treason

If the US has any laws agains treason, the Republican leader John Boehner should be tried under those immediately.

At least ince 2005, it has been clear that one of the major causes of economic instability around the world is the value of the Chinese currency, the Yuan or Remnimbi, which is deliberately kept low by the Chinese government.

It is well documented that the US elite has betrayed the interests of the people of the United States ever since Nafta was signed, and then the WTO agreement,and then the bringing in of the Chinese into the world trade system without any safeguards or meaningful guarantees.

All measures to bring the Chinese into line with their own commitments have been systematically thwarted by the US elite of both parties.

And now the latest attempt to bring the Chinese into line is being opposed by none less than the leader of the Republican Party in the House of Representatives!

He does not seem to understand that we are in the middle of a currency war and that, following the refusal of the Chinese to strengthen their currency (attempts have been made to persuade them to do so since before 2005) EVERY country is trying its damndest to weaken its currency.

If we don't understand that, then we don't understand an important part of the logic for Quantitative Easing around the world, and we don't understand the logic for the decisions regarding whether European authorities wish to rescue Greece et al.

If China were to allow its currency to strengthen, it would create room for all currencies to strengthen and we would have space to move beyond our current currency wars.

Having said that, I do understand that Chinese authorities may feel that this is not be the right time for China to allow its currency to strengthen, given that it is beginning to face a crisis that has been a long time coming. China should really have taken the opportunity to allow its currency to rise when it was in a strong position. But even now is not an impossible time for China to move to making the sorts of structural changes that are necessary if the country is to prosper. Otherwise, like Japan from the 80s, China may find that it has now reached the limit of its rapid rise in prosperity. Sphere: Related Content

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