[Batrachian]

This business of strengthening Chinese currency is a weak solution. Profits on Chinese made products are so high that they could strengthen the Yuan drastically without affecting consumer prices the least bit. The exporters and retailers would simply take a hit on their monstrous profits. Furthermore, China does not have a consumer economy the way the U.S. and European countries do, so any price reduction based on a weaker Dollar wouldn't result in more exports to China, at least not on the consumer level. Lastly, this article ignores trade barriers in China, which are extensive.

The real problem is that China simply isn't buying. We could import their products at current levels and it wouldn't really be a problem, if they in turn bought from us. They don't, and that's the problem. Same with Japan, S. Korea, and many other places. They're happy to sell to us, but they've made a conscious decision not to buy from us. Currency manipulations won't solve that.

[witnesstothefall]

Good analysis. But I feel the greater consideration for us is the massive accumulation of our debt by our strategic long-term adversary.

China is glumly and quietly digging us a large hole. The article linked below describes this accumulation as against China's own interests (threat of inflation), which makes one wonder WHY China is pursuing the policy she's on.

"Senators Say China Is 'Cheating,' Urge Bush to Press Harder on Exchange Rate"
http://highmarkfunds.stockpoint.com/highmarkfunds/newspaper.asp?Mode=Asia&Story=20030912/255e9441.xml

[Heartbreak of Psoriasis]

The real problem is that China simply isn't buying. We could import their products at current levels and it wouldn't really be a problem, if they in turn bought from us. They don't, and that's the problem. Same with Japan, S. Korea, and many other places. They're happy to sell to us, but they've made a conscious decision not to buy from us. Currency manipulations won't solve that.

I agree with your analysis. But it begs the question of why we put up with it.

Why did we allow Japan, Korea, and now China to maintain an enormous trade surpluses with us for so long? This isn't some new problem as you know. It's been going on for at least 25 years.

Who benefits from this gargantuan transfer of financial leverage from the United States to foreign states?

Why is our political system incapable of dealing with it effectively?

[DManA]

Not only don't they buy, they actually steal what they need from us - eg. Software and other intellectual property.