Posted on 08/17/2015 7:08:53 AM PDT by SeekAndFind
On Tuesday, August 11, China began devaluing its currency unit, the yuan against the U.S. dollar. Later that day, Republican presidential candidate Donald Trump denounced China, saying:
"I think you have to do something to rein in China. They devalued their currency today. They're making it absolutely impossible for the United States to compete, and nobody does anything."
For a candidate whose pitch is based upon being smarter than everyone else, Trump has taken a spectacularly stupid position with respect to China-not just economically, but politically. After all, it was less than three years ago that Mitt Romney threw away his chance to win the 2012 election by running TV ads in Ohio accusing China of "currency manipulation." The electorate did not buy monetary mercantilism then, and they would not buy it today.
Here is what there is to understand about China's currency move. Last week, China began manipulating the yuan in the same way that The Donald would manipulate his Mercedes on a winding mountain road in order to avoid following the car in front of him off a cliff. The People's Bank of China (PBC) simply did its basic job: it moved to keep the real value of the yuan (approximately) stable.
During the last four days of last week, the value of the dollar rose by 2.26% against the CRB Index*, while the yuan fell by 2.84% against the dollar. The net result was that the real value of the yuan fell by 0.64%. This amounts to a rounding error, not a currency war.
The Donald's assertion that dollar/yuan exchange rate is a source of America's economic woes is absurd. In late 1990s, the U.S. economy was growing strongly. We reached full employment in April 2000. Obviously, China and the yuan were not problems for us then.
(Excerpt) Read more at realclearmarkets.com ...
That’s why Milt lost the election? Hahahahaha!
During Trump’s interview with Hannity last week, Trump indicated he has a great relationship with China (unlike Obozo).
RE: who is Louis Woodhill?
FROM THE FORBES MAGAZINE WEB PAGE:
http://www.forbes.com/sites/louiswoodhill/
Louis Woodhill
I apply unconventional logic to economic issues.
I am a software entrepreneur who is currently an investor and board member in three startup companies. I have a B.S. in mechanical engineering. I was born in 1948. This chapter of my life is about trying to help people make their dreams come true. I started writing about economics because I hate the way that our dysfunctional economy is crushing the dreams of so many people. Young people are delaying getting married and having children because of unstable jobs and incomes. It doesn’t have to be this way, and I want to contribute to solving the problem. I believe that prosperity is possible.
America isn’t apologizing to China.
Meant it like I said it. Trump is our future president.
America is done apologizing for it’s existence.
Who cares if China did what it did because it needed to? All we care about is that they have unlimited access to our market and the devaluation makes an already tough sell in their market next to impossible for us now. I’m an American with no time to worry about Chinese business.
This is pure BS, particularly the part about Romney. Romney lost Ohio due to the electorate not believing his statements about “Money Mercantilism”? That could possibly be the dumbest lie I’ve ever read.
And wasn’t it China itself who actually stated their reason for devaluing the Yuan was to make exports more affordable? The author of this article seems to have an agenda, I’m thinking.
I can remember when cozying up to
Commies would get you tarred an feathered, figuratively speaking. Of course, that was before Corporate America could use Commie slave labor to maximize profits.
“The electorate did not buy monetary mercantilism then, and they would not buy it today.”
The electorate doesn’t generally think about ‘concepts’ like monetary mercantilism. Not because they’re not smart enough to understand the concept, but because it is the kind of ‘nuance’ they are sick of. What isn’t a ‘nuance’ is that people are out of work, and the nation is in debt (including debt to China), and manufacturing jobs have gone overseas, and our trade deficit with China is huge.
This guy has it entirely wrong, and speaks/writes as though China is an entirely benevolent nation, just trying to do the right thing. If he truly thinks this way then he needs to return to reality. On the other hand, I wonder how heavily his financial portfolio is weighted to Pacific rim stocks.
5.56mm
Forbes.com has become a joke.
Did Woodhill make his own billions? Maybe I’ll listen to the guy who did.
Except China didn't get PNTR with the US until 2000.
I have been wanting to comment about this (Fed Reserve) for quite sometime- even before Trump announced- because I truly believe it’s one of those issues that can actually create a “movement”. This is something that could rally a lot of conservatives, libertarians, and yes, even “some” liberals! The thought of reigning in the Federal Reserve. I am shocked that in this day in age the majority (99%- freepers not included of course LOL) of the population does not know how “money” works. The ONE thing that everyone has to use regardless of their skin color or political affiliations! The debasement of the currency since the 70s and worst yet the ability of the Federal Government to run up such large deficits and have our National Debt at almost 20 Trillion Dollars has only been achieved with the help of the Federal Reserve (which is not part of the U.S. Gov’t)! The fact that most Americans cannot correlate the slow economic growth in relation to the ever increasing debt is mind boggling. The fact that not one candidate can put the two together is even more shocking. Most Americans understand that if you’re issued a “new” credit card- every month- with higher spending limits, and lower interest rates, that eventually your income will stagnate and most of it (if not all) would go towards paying off the interest alone. At some point, even at 0% interest, you will NEVER be able to pay off the principle! This is what has been happening for the past 15 years! The U.S. Gov’t can NEVER pay off the debt (much like Japan today) and the ONLY way it can continue to function (i.e. spend more) is to borrow more- not from China but from the U.S. Federal Reserve! The more indebted we are the slower our economy grows and the worst the disparity between the “0.001%” and everyone else! This is not about class warfare but about those closet to the spigot (i.e. Big Gov & Lobbyist, Big Biz, Big Military, Biz Pharma, Big Unions, Big Tech, etc...) benefitting the most while the average “Joe” and small business are being crushed!
The FOMC maybe initially quelled a problem with liquidity; but, arrogance led to a fall. Political motivations supplanted nuanced judgement within the Federal Reserve. Presumption of having control such as to force a move against fundamentals, as described within “long wave theory”, prompted cheap money (unlimited printing) to levitate stocks which were dropping toward valid valuations.
Follow whom benefited from exaggerated stock and commodity moves, to know whom the FOMC serves. All the ammunition (low interest rates) was expended in those pursuits. Now (July 2015 —> ) with a more severe (versus 2008) commodity deflationary episode, they have no option to lower interest rates available as a counter-move.
FUBAR! Option remaining: Pick up the pieces left after the pending crash, or war, or both.
*****So sad but true! The powers that be would put out a hit on him. They can’t have their gravy train derailed!
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