We live in a world of currency manipulators and currency debasers.
The currency manipulators are the merchantilist East Asian countries whom have spent decades poaching the industrial base of the West and on the other side we have currency debasers, which are of course the defaulting, defunct Western countries now left with nations of dependent consumers in their so called “consumer economies”.
This bizarre world of currency manipulators vs currency debasers was
played out over the last month as we saw the Chinese Yuan get stronger
and stronger before the U.S. elections and the annual decision on weather
to call China out as a currency manipulator. Are they a manipulator?
Duh…of course. The Chinese Central bank and their state owned massive
banking system go out into the markets daily selling Chinese Yuan and
buying U.S. Treasuries with the expressed intent to keep the RMB fixed
within a tight range to the U.S. Dollar.
This week, once again U.S. government declared China not a currency
manipulator.One must wonder, what kind of back-room leverage Beijing
now has over Washington. It must be something even more frighting than
the $1 trillion in U.S. Treasuries they own.
As predicted…we watched the Chinese Yuan get stronger and stronger in the
month running up to Presidential elections and this decision on currency
manipulation. The day after the decision, of course, the Yuan falls off
a cliff.
The Chinese government does not even respect the naive Washington D.C.
officials to even mask their manipulation more than 1 day after the decision
comes out.
Over the last several years, we have seen U.S. delegations coming to China
to complain about currency manipulation. The Yuan gets stronger and
stronger up until the U.S. delegation leaves town…then it falls down again back
to pre-existing levels. Right where the Chinese want it.
American officials are the laughing stocks of free trade. Washington D.C. is a
city of naves, living off the printed money that comes out of the Federal Reserve.
Unfortunately the joke is on the American worker.
Source
