Posted on 10/27/2009 1:28:52 AM PDT by TigerLikesRooster
Asian Economies Face Double Whammy
Export-dependent Asian economies are suffering from a double problem. One part is the continuing weakness of the U.S. dollar and accompanying depreciation of the Chinese yuan, which is hurting the price competitiveness of products exported by Korea, Indonesia, Malaysia and Thailand.
The other is that they are being pressured by the international community to reform their economic structures to become more focused on domestic consumption as a way of relieving a perceived imbalance in international trade.
China unpegged the yuan from the U.S. dollar in July 2005 and adopted a currency basket system, a more flexible exchange rate. Over the following three years, China allowed the yuan to appreciate 16 percent against the dollar. But in July of last year, the yuan was re-pegged at around 6.82 to the dollar.
(Excerpt) Read more at english.chosun.com ...
So China would settle for continued huge trade surplus and amassing further dollar reserves. They find it safer than the alternative outsiders are urging.
Disengaging from Chimerica loop is too drastic for China, as it has been to U.S. As a result, both are sinking together. U.S. first, and China to follow soon.
In the mean time, Zero and Ben gets to have more spending money.
Ping!
“Currency basket”, let’s see where have I heard that? O, now I remember OPEC, Russia etc want to price oil this way. On another note, isn’t nice how a communist country will let their own people suffer instead of prosper?
Wasn't it GHWB who pushed Most Favored Nation status for China, in spite of their refusal to meet the Human Rights requirements for such status?
We opened up our consumer market to China, in spite of their near-slave-labor conditions, and in the process devastated our own manufacturing base, displaced millions of American workers. The vast majority of those American workers have never regained their previous level of income, and therefore are not consuming at their previous levels.
Had the Human Rights requirements for China remained intact, as a condition for access to American markets, China would have been required to provide a civilized level of compensation for its workers, and consequently would have developed their own sustainable economy.
Instead, a handful of Free Traitors got wealthy, America got an economic collapse, and China is still an export-dependent third-world cesspool.
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