Post by kathaksung on Dec 1, 2006 18:15:03 GMT -6
439. The exchange rate of Chinese currency (9/30/06)
China has kept the exchange rate of its currency against dollar for more than ten years. The undervalue of Yuen lowers the cost of Chinese products. It created a huge trade deficit for US. That deficit surpassed $200 billions last year. Many economists said that made US losing millions of job opportunity. But to raise the Yuen's value will cause an inflation in US since now so many merchandise are imported from China. That would force the interest rate going upwards. Feds wouldn't allow such thing happening. So China could stick to its fixed exchange rate.
China did raise Yuen's value by 2.1% on 7/21/2005. It coincided to second London bombing. Obviously it was part of Feds' plan in their framing case. The framing case went soured, and further revaluation of Chinese currency postponed.
This March, the huge trade deficit against China caused an angry storm in Capital Hill. A bipartisan bill to slap a 27.5% tariff on all Chinese products would be proposed if China kept on manipulating the currency. But at the end of March, the plans for the bill dropped. Sen.Charles Schumer and Lindsey Graham, the most relentless critics of China announced cease fire. They said they would revive the bill in September if the condition not improved.
The interest of US had to give way to the interest of Feds.
Today is the last day of September. Yuen climbs up 1% and something since then. Far from the 25% to 30% revaluation the senators want. Where is the tariff bill and the voice of lawmakers? None is heard. Because the home prices dropped in August - the first year-over-year decline since 1995. So go away tariff bill. Go away trade deficit. (Even if China likely will swell its trade surplus a 20% this year) Feds need help.
There is a historical current account deficit and trade deficit for US. Oil price has doubled this year. The inflation and high interest rate is unavoidable. Yet the interest rate of 10 year treasury note drops to 4.6%. Compare with the 5.25% of overnight federal fund rate, It's absolutely abnormal. Another strange thing is, I saw rare media reporting any explanation for this absurd phenomenon. Economists have no idea what it is. I here offer people a window how Feds manipulate all these. For their interest in real estate market, they abuse their power to make a mess in economy. As everything is tightened to the extreme point, US is facing a depression.
China has kept the exchange rate of its currency against dollar for more than ten years. The undervalue of Yuen lowers the cost of Chinese products. It created a huge trade deficit for US. That deficit surpassed $200 billions last year. Many economists said that made US losing millions of job opportunity. But to raise the Yuen's value will cause an inflation in US since now so many merchandise are imported from China. That would force the interest rate going upwards. Feds wouldn't allow such thing happening. So China could stick to its fixed exchange rate.
China did raise Yuen's value by 2.1% on 7/21/2005. It coincided to second London bombing. Obviously it was part of Feds' plan in their framing case. The framing case went soured, and further revaluation of Chinese currency postponed.
This March, the huge trade deficit against China caused an angry storm in Capital Hill. A bipartisan bill to slap a 27.5% tariff on all Chinese products would be proposed if China kept on manipulating the currency. But at the end of March, the plans for the bill dropped. Sen.Charles Schumer and Lindsey Graham, the most relentless critics of China announced cease fire. They said they would revive the bill in September if the condition not improved.
The interest of US had to give way to the interest of Feds.
Today is the last day of September. Yuen climbs up 1% and something since then. Far from the 25% to 30% revaluation the senators want. Where is the tariff bill and the voice of lawmakers? None is heard. Because the home prices dropped in August - the first year-over-year decline since 1995. So go away tariff bill. Go away trade deficit. (Even if China likely will swell its trade surplus a 20% this year) Feds need help.
There is a historical current account deficit and trade deficit for US. Oil price has doubled this year. The inflation and high interest rate is unavoidable. Yet the interest rate of 10 year treasury note drops to 4.6%. Compare with the 5.25% of overnight federal fund rate, It's absolutely abnormal. Another strange thing is, I saw rare media reporting any explanation for this absurd phenomenon. Economists have no idea what it is. I here offer people a window how Feds manipulate all these. For their interest in real estate market, they abuse their power to make a mess in economy. As everything is tightened to the extreme point, US is facing a depression.