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China Retaliates: Ministry Of Commerce Says US Should Not Seek To Boost Exports By Forcing Others To Appreciate Their Currencies
Well that didn't take long. China just escalated the verbal quarrel with D.C. by retaliating right back. The Chinese Ministry of Commerce stated earlier that the "US should not seek to boost its exports by forcing other countries to appreciate their currencies." The spokesman for the Chinese Ministry of Commerce Yao Jian also told reporters that the US shouldn't be seeking to "develop its own economy" by forcing other countries to strengthen their currencies. We are holding out breath to see what China's reaction is when Geithner forwards them the petition signed by 130 very much erudite congressmen demanding that Beijing float the CNY immediately (or else America will be more than happy to live with a 7% 30 year mortgage).
More from Market News:
In the first direct reference to Obama's export goal by a Chinese government agency, the General Administration of Customs said last Friday that the target threatens China's global market share and warned that the era of fast Chinese export growth is over.
Yao reiterated that China's trade policies -- including those related to the yuan exchange rate -- will remain stable, warning that there are still few grounds for optimism about the trade outlook.
He also charged that the U.S. stance on the yuan exchange rate isn't helping global trade conditions.
In the meantime China just added a little insult to injury by setting the offical CNY partity lower on Tuesday at 6.8263 compared to 6.8621 Monday.
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The official US response:
"I shall fart in your general direction"
Now go away or I shall taunt you a second time.
Actually, I think official US response is to hold a match to Iran, since China is the number one oil and gas importer from Iran.
That's why China has been gearing up oil purchases and topping off those two huge reserves they built in response to the response we gave them before the other response.
I await your... response.
China also has oil deals with Russia Canada, and other countries. Iran is not 100% of where China receives their oil. While the USA has been very busy filling the bottomless pit of financial money destruction, China has been very busy making strategic deals for oil/energy, building more power plants within their country, plans to build many nuke power facilities... and buying commodities and miners of various items. China is playing an excellent 'game of chess' whereas the USA is wasting time/energy/money trying to save their financial system that produces nothing (per se).
China for the win.
PS: Next time you manufacturer a product that needs rare Earth metals such as the new 'green' initiative, guess who has an over 90% lock in that sector. HINT: It is not the USA.
China has been a leading force in the world for THOUSANDS of years. Then England got them hooked on drugs to better be able to control them and England lead for a short time. Then the USA came into being.... and lead for only a handful of decades. Today we see that once again China may take a leading role in the world as they have done for thousands of years.
You awaitied a response, well, be careful what you ask for as you may indeed get it.
Exactly MT, its a competitive world and we went to
sleep. Or is it a coma? Unfucking believable......
Relax, have some humor from The Onion.
In The Know: Should The (USA) Government Stop Dumping Money Into A Giant Hole?
www.theonion.com/content/video/in_the_know_should_the_government
Sometimes ZH'ers the truth hurts eh?
"fetchez la vache!"
http://www.youtube.com/watch?v=YV0LGMGuLN0
No country can win this kind of poking game with China.
Even though Geithner knows their culture, he is still willing to play it. Unless they are looking for scapegoating.
With this kind of talk occuring in the headlines, sheeple are going to start realizing just how vacuous fiat money really is. Gold and silver just got a long term boost.
US is playing with fa fa FIRE!! They're in no position to talk tough. 7% Bond, yeah maybe in 6 months! After that it's HyperTime!
"130 very much erudite congressmen"!!!???
Surely thou doest jest?!
That's just too damned funny. In Krugman's editiorial, he used the 1971 cramdown that Nixon accomplished against Germany and Japan as the model for pushing China. Of course, we didn't rebuild China after WWII so they have no moral obligation to do anything. Are any of these people the least bit aware of what goes on in the rest of the world or do they just make stuff up in their minds from whole cloth?
The Chinese government needs a late night stand up comedian to try to explain some of our policy statements to the Asian investment community. Stewart and Leno aren't really stepping up to the plate on the good stuff this administration is putting out.
Let me get this straight. Bernanke and Geithner have tied concrete blocks around the feet of the US and are threatening to throw the country off the dock if China does not kiss Obama's butt.
Remind me again why we trade with and borrow from communist dictatorships?
Familiarity.
nice.
No worries about a 7% 30 mortgage, as long as Direct-Bid-Ben is the helicopter captain.
Let interest rates go up so the price of housing can come down. You can always refi later, but you can't get the price lower later.
Exactly. In a normal world that is.
So the US decides to tell their biggest creditor and also largest importer to basically make their stuff more expensive and stop lending us money while china retorts by basically saying no, please, take my money and my stuff for nothing.
WTF???? I thought Asians were smart.
Because that's how they keep their trade surpluses and DXY reserves. If they were forced to trade at reasonable levels, they wouldn't have as much export business to the U.S. and their people wouldn't be employed.
Plus, they wouldn't have us by the balls by keeping us in debt to them.
There are so many reasons we should force them to appreciate their currency, but people in our country are afraid that we won't be able to buy cheap junk from China for a couple of years instead of looking at the long term and actually making stuff in America again.
I agree in the long run that increasing exports in this country would be beneficial, but not by debasing the currency. And I think it would be beneficial to China if they would allow their currency to appreciate.
Bates lets pretend for a second that you and I were the United States and China. Lets pretend that you, as the United States, have to borrow money from me to buy my goods, and that you keep borrowing more money every year. How do I benefit by giving you money to buy the stuff I made from the product of my labor when you never pay me back and I end up with less resources, and a loss of labor. China might in the short term lose employment due to lower exports but in the long run increasing the value of their own currency would increase domestic demand (as the increase in value would equate to higher purchasing power) and they would be far better off.
Overall I agree with what you said, however I think that the benifits you listed for China if they were to keep the dollar peg do not out weigh the lose they suffer by keeping it that way.
i know many construction firms who bid at cost during tough times, just to stay open...
while their competition withers away, they're open another day.
This is different. China is trading goods for checks they know are hot. The US is demanding a decline in its purchasing power.
Topsy-turvy world.
I guess the Chinese plan is, they do some kind of coordinated Treasury dumping and currency de-peg, and then use all the dollars they've accumulated to buy a buttload of US assets, since we won't be able to afford them any more.
I don't know if it'll work, but I think that's their plan.
it certainly would be easier to implement with a larger shot at success than "forcing" the chinese to revalue their currency versus the dollar. how exactly would that be done? if it involves military force, how many simultaneous wars does one think the u.s. can continue to fight poorly (at the strategic level, not the soldier level)?
If they figure out a way to short the US market and cause deflation where dollars buy more they will make out like bandits . They have no incentive whatsoever to bring up the value of their currency .They have every incentive to cause the valuation of the US dollar to rise . If and this is a big IF , they can survive without the US buying their products and get their own citizens consumption numbers up (like they did with cars) they are free to do whatever the hell pleases them or is most beneficial .Question is are they there yet and was the first leg down a affirmation that they can survive without the West? If so the only thing the US will have going for them is Afghanistan, Iran , Iraq and Syria where they will have control of every port where oil is shipped from in the area .
WTF???? I thought Asians were smart.
How To Be A Drug Dealer (or so i've ben told. Am making this up as i type it, yet you be the judge)
1. Free sample at first
2. They like it.
3. Offer it cheap.
4. Get them hooked, so they can't live without it
5. Control them, you insure you are their main supplier
6. They are now hooked to you/r supply
7. Use control to manipulate their movement/actions
8. Once you are in full control, slowly raise the stakes.
SUGGESTION: Read the history of how and why England got Asians hooked on drugs. The evolution of that situation as it played out. Then the eventual and final effects/outcome.
This US-Chinese spat seems awfully staged. In such a confrontation, the US and the Chinese elite would both lose, which means this is theatre for the world to deflect attention from what's really going on.
http://wp.me/px1MN-fp
so does our recent yakking at Israel, along with the timing of their announcement. and now with the posting about possible iran attacks...
without judging the politics, i feel like it's all rehearsed and timed - each roll of the dice just happens to come up ...
it doesn't seem honest, but i don't even have a hint of the strategies underneath it all. (which is how "they" want it, of course)
not good.
How true. The goal could be to protect the local/global elite from the public, but what do I know?
China is giving the US a warning also.
Oh FFS, just hurry up and do something someone!
I'm so glad every government in the world is looking out for it's citizens by not letting their currency appreciate. We may not have globalization this time around but we will probably develope the first global underground black market economy.
Appreciate Their Currencies
i have a stack if their currency ,, i appreciate the whole bundle
Why is the US fucking with the US Bank of China? WAY TO GO CHINA!!!!!
US: We cannot manage our economy without monetizing our debt, yet if we go any further with that its gonna cause massive inflation. If the Chinese economy is directly tied into that it'll cause a worldwide Depression (making it impossible for Transnational corporations to turn any sort of profit)
CH: While we thank you for taking the $MBS securities off our hands, if we chose to de-link the Chinese economy from the reserve currency it would be inconveniet for our trading partners (besides, if you get screwed we're the de-facto global economic leader). We have every confidence that the US Administration will be able to convince its bond-holders as to the sustainability of its deficit.
US: Would that this were so, unfortunately, we feel that when Israelis drop bombs on Iran from 50,000ft the resulting Oil-shock would hamper the demand growth of your same trading partners.
CH: Though we would deplore such violence we might agree that the involvement of such sophisticated military interests as those of the US, UK, Russia and China in such a conflict would act either as a significant deterrent or, result in a speedy conclusion.
Unless the usa is prepared to back up their whining with tariffs this is laughable.
The Chinese never answer the question (and are never made to do so) of why don't they float the yuan if they think it won't rise and/or is fairly priced. They know the answer to this question but they think the rest of the world is dumb. Maybe maybe not but their is only one way to find out. Float the damn yuan.
The rest of the world is dumb. Why else would they tolerate a pegged yuan?
Chinese have been screwed by the Western World for the past couple of centuries and have every right to be wary of us. As "MarketTruth" points out the Brits got them hooked on opium because the Brits were hooked on tea and only wanted to pay for it with opium, had three wars (Opium Wars) to keep the Chinese hooked. BTW - Opium only grown in Asia, not like the Brits were making it at home. Then every Western nation had a piece of China in the early 20th Century until their revolution which finally gave them their country back. If I was Chinese I would not trust us either but would do exactly what they have been doing - "using us to make money".
Chinese have one strength we don't have - PATIENCE.
'Patience' is the name of that stripper in Salt Lake......
"China has been a leading force in the world for THOUSANDS of years."
Hmmm, history shows them to be capable of inspiration and sometimes innovation, but not so hot at application. Centuries later, all you have to do is whisper 'Genghis' and the myth of Chinese superiority goes up in smoke.
Strippers in Salt Lake? I had a hard time ordering coffee in a restaurant there apparently it is mind altering and not allowed.
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