President Hu Jintao: China will act “based on its own economic and social-development needs”

by | Apr 13, 2010 | Headline News | 6 comments

Do you LOVE America?


    The subject of the Yuan currency came up at the Nuclear Security Summit this week, and Chinese President Hu Jintao made it clear that his country will not bow to international pressures regarding their currency:

    President Barack Obama urged China to move toward a “more market-oriented exchange rate” and President Hu Jintao told him the country wouldn’t yield to “external pressure” in deciding when to adjust the yuan.

    Any currency revaluation by China must be “based on its own economic and social-development needs,” China’s official Xinhua news agency cited Hu as saying in yesterday’s meeting with Obama in Washington.

    So much for a free-market in China, where currencies are allowed to float depending on supply and demand.

    Is China a currency manipulator?

    Treasury Secretary Tim Geithner has delayed a report for several weeks, likely because the Chinese delegation was to visit Washington and the President wanted to avoid any sort of conflict in this regard. But, the fact is, that China is a currency manipulator. If the Yuan was to be allowed to float freely, it would most certainly appreciate against the US Dollar, allowing the US to ramp up production capacity which would make us more competitive with exports. This, of course, would not bode well for the Chinese.

    To be fair however, even though the US Dollar is a freely floated currency, does that mean the US Dollar is not under manipulation?

    We’d suggest that the very idea of dropping dollars from helicopters in order to counter deflation and debase the currency is in itself a manipulation. Of course, Messrs Bernanke and Geithner will not be releasing any such reports in this particular case.

    In the case of a free-floating Yuan, we should be careful what we wish for. According to Peter Schiff, When China Pulls the Peg, Cardiac Arrest Will Follow in the USA:

    De-pegging will force the hand of U.S. politicians toward pursuing realistic policies. The Chinese will come to their senses eventually because it is in their interest to do so. Meanwhile, the longer the peg is maintained, the more indebted we become, the more out of balance our economy grows, and the more our industrial base shrivels. In short, the longer they wait, the steeper our fall.

    If Schiff is correct, then the Chinese President indicating that the Chinese will act in their own interests is a multi-fold strategy, whose goal is not just to keep China as the top exporter in the world, but also to further weaken America by forcing us to continue to borrow money as our economic system is further destroyed under the weight of excessive debt.

    There’s a global war being waged on multiple fronts, and the Chinese are playing for keeps. Does President Obama understand this, or is he still dreaming of a day when the Chinese, Russians, Venezuelans, Europeans, Iranians and Americans can all hold hands and sing Kumbaya?


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      1. Kumbaya, Lord, kumbaya …………….

      2. I won’t pretend to be an economist or to be deeply versed in the dark art of finance, nor the subject of currencies, but I will comment  anyway. To say that China is a “currency manipulator” kinda conveys a cloud of negativity and implies something inherently dishonest or underhanded. I assume this logic draws upon the so called principles of the almighty “free market”. What bothers me about it is the fact that everyone “manipulates” their currency, in some way or another.  To seek a greater advantage is as natural as breathing.
        In truth there are no rules in this world. The law of tooth and nail reigns supreme albeit under a veil of supposed civility. Sure if China allowed the Yuan to appreciate, our exports may enjoy an increased market share. Does China have an obligation to do so? Not really.  Do we have a right to demand as much? Not really. Can we still do so? Certainly. Does China force us to use a fiat currency? Everyone is looking for self advantage; if it happens to be mutually beneficial, then so much the better.

        As a side note  to you Mac, I like your site and it is on the top of my go to bookmarks. I visit just about every day. Keep up the good work. You tend to be a class act with your articles as well as your responses to our comments. Thanks for your services.

      3. Yeah, like it’s only Obama.  Fuckin please, it’s every president since Johnson.  All this pro-business “globalism” is what’s put us in this position and is doing us in.  This has been decades in the making.

        Z, it’s not that I’ve given up, it’s that I recognize the reality of the situation.  I’m taking my skill set and my resources and putting them to work taking care of the people I most care about.  There is no help for the country as a whole.

        I can see four separate countries arising out of the ashes of the USA.  Hooterville will be from the northeast across to about half way thought the Dakotas.  This is where all the nasal talking big-nose new yorkers will live.  This is the land of shit talking and smelly armpits.  “New” Mexico will be from texas to about humbolt county california.  The official language will be mexican, wages will be shit, but everyone will have low-riders.  jesusland will go from florida to about salt lake city.  All of the total dumb-asses will live here, and there will be no rapture to save them from stupid church services or shitty food at furrs cafeteria.  Hippieland is where I live.  Humbolt county to the Canadian border.  Lots of us armed dopers on the southern borders to keep out the jesus types and the god-damned mexicans.  Those new york assholes too, no one wants them around here.  There will not be a single church left standing in Hippieland.

      4. Jonny V, You literally had me laughing out loud! Nice touch with the “furrs cafeteria” blast. These certainly are “interesting times”!!

      5. Jonny V:   Can’t agree on everything you say, brother, but I love the way you say it. 🙂

        You are so damn subtle!   Semper Fi

      6. Good to hear from you Z!  Just having a few beers and some fun!

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