China Currency Bill: Congressional Action

[RichardAWilson]

The Chinese Currency Bill is too little too late. Nonetheless, it's nice to see that the Democrats are approaching this matter.


Bernanke, asked at a hearing whether the Fed has calculated the number of U.S. jobs lost due to an undervalued yuan, said it’s “difficult to estimate.”

He told the Joint Economic Committee:

“A more normal recovery, more balanced recovery would have some more demand being shifted away from the emerging markets toward the industrial economies. China's currency policy is blocking that process and is certainly a negative.”


The bill mandates that the Treasury Department identify misaligned currencies, instead of finding that a currency was manipulated, as is currently required.

Governments that undervalue their currencies and don’t take corrective action would face penalties, including increased dumping duties, a ban on federal procurement in the U.S. and ineligibility to receive financing form the Overseas Private Investment Corporation.

Meanwhile, anti-American Republicans are working to block the legislation.

[kapitalyst]

Yeah, weakening national currency = brilliant idea... :rolleyes:

We'll help exporters collect more dollars, which we just printed, so they can spend it here at home on goods and services that all proportionally cost core and add no economic value to the economy. And what's really brilliant is doing this in a country that imports more than it exports, and for the supposed benefit of a few businesses instead of 300,000,000 Americans... I just love Fed-logic... :laugh:

[RGacky3]

Yeah, weakening national currency = brilliant idea... http://www.revleft.com/vb/china-currency-bill-t162148/revleft/smilies/001_rolleyes.gif


Because Chinas export economy sucks right.


And what's really brilliant is doing this in a country that imports more than it exports, and for the supposed benefit of a few businesses instead of 300,000,000

Then you gain manufacturing jobs, where you can export, then you have a stronger labor force due to lower unemployment, allowing workers to make more demands and unionize easier.

[RichardAWilson]

This is where I know you're misconceived.

If we had a Gold Standard, like you advocate, we'd have to devalue our dollar and restrain consumption because of our large and unsustainable trade deficits.

[danyboy27]

Its a fucking declaration of war against the chinese governement, i doubt beijing will just sit on their hand and do nothing about it.

My guess is, the chinese governement might just decide to get rid of the dollar all together or put their money into internal projects, slowly decreasing their trade with the U.S and jacking up american consumer good price at a biblical level.

[RichardAWilson]

Doubtful. The Chinese still need us.

[RGacky3]

Kapitalyst has NO idea how economics works, he has such a simplistic view his responce is just "devaluing!!! It must be bad."


Its a fucking declaration of war against the chinese governement, i doubt beijing will just sit on their hand and do nothing about it.


Yeah, but the Chineese government have basically been doing the same to the US the whole time, the US can't be scared, right now they still have a bare upper hand.


My guess is, the chinese governement might just decide to get rid of the dollar all together or put their money into internal projects, slowly decreasing their trade with the U.S and jacking up american consumer good price at a biblical level.

The Chineese still rely on US consumption, to a large part, the US still has the upper hand but its loosing it, they should have done this a long time ago, but its about time.

If the Chineese put all their money in internal projects they are gonna have a problem with inflation first of all, then a problem of internal consumption and then a soveriegn debt problem.

There is no way China is gonna drop treasuries and given the fact that everything else is in trouble the market for them is going up.

Even if they do slowly decrease trade with the US, (which they'll do anyway), we will be able to finally build a demostic productive economy.

[danyboy27]

I agree with you on that Gacky but still, i doubt the chinese will just stand idle and do nothing about something that would threaten their stunning economic growth.

they will respond somehow.

[RichardAWilson]

The Chinese are in a Catch-22. =) A response would do as much damage to them as it would do to us.

[Sperm-Doll Setsuna]

The Chinese are in a Catch-22. =) A response would do as much damage to them as it would do to us.

Us and them? :rolleyes:

[RGacky3]

The Chinese are in a Catch-22. =) A response would do as much damage to them as it would do to us.


Exactly, China definately does not have the upper hand on this.