Friday, August 3, 2018

US May Lose Currency-Trade War With China

According to this report, the Chinese are going to kick our butts:

The Chinese renminbi (yuan) to the US dollar has fallen again on Friday, marking its lowest level in 14 months. The dollar gained as much as 0.8 percent and cost 6.8926 yuan. The South China Morning Post also reports that the so-called offshore yuan traded outside of China fell to a 15-month low.

Meanwhile, there are increasing voices that speak of a deliberately approved devaluation of the yuan by the government in Beijing. Such a devaluation to the dollar is an appropriate means of cushioning the negative consequences of the US government's punitive tariffs on Chinese exporters . "China seems willing to let the yuan's price be squeezed by market forces," said investment strategist Ian Hui of US Treasury JP Morgan. This would cushion the impact on the economy. A falling yuan rate improves the competitiveness of Chinese goods in the world market.

The economist James Rickards sees a controlled devaluation of the yuan as the strongest weapon that the Chinese have in dispute with the US government.

You can read the rest @ [translation required]

I sorta agree that China has been taking advantage of us, but shooting ourselves in the foot like this is not an appropriate response. Especially when we have to borrow a zillion dollars to finance our warmongering:

We seem to be setting ourselves up for a GIGANTIC economic fall. Then what? More soup kitchens?

1 comment:

  1. China is willing to fight this to the end, and it may mean the end of the US economy:

    Our only 'strengths' lie in Wall Street and our military, but we really cannot afford either of them anymore.

    Gigantic FAIL ahead.