Here is some truthiness from the People’s Republic of China, courtesy of Washington Trade Daily.
Stability in China’s yuan is important for the stability of global trade and the world economy, Chinese Commerce Minister Chen Deming said in comments broadcast on Saturday according to a Reuters news service report from Beijing (WTD, 2/19/09). Chen also told BBC World News that he thought the media may have misinterpreted comments made earlier this year by U.S. Treasury Secretary Timothy Geithner that China was manipulating the yuan
He said he did not have the impression that the US government thought China was manipulating its currency. Chen added that he expected to see a large impact on the Chinese economy in the first half of this year from the financial crisis and that the government would reassess its 8 percent economic growth target mid-way through the year.
China (and South Korea, Japan, Singapore, and Taiwan) manipulates its currency for strategic national objectives. You cannot be a free trader, against government intervention and distortion, and support or defend currency manipulation.
Well, you can, but you need to position your mind in an alternate reality. And they do.
If you are for free trade, you are against subsidies and tariffs. You must then be against currency subsidies and tariffs, because that is what they are.
If you are for free trade, you must be against currency manipulation.
If you are for currency manipulation by China, you must be for U.S. government currency manipulation in our strategic interest.
There is no middle ground.
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I recall vividly the global grain trade convesations during the 1980/s when I served on the Board of Directors for a Cooperative Grain Marketing organization. The CEO would announce to the board that we had just lost a tender for a shipload of wheat to a first line customer. The CEO would then explain how competitive we were and other comments concerning the exporting country that had just taken US wheat out of the market. We would take a break from the meeting and as we passed by the doorway of the trading floor,one had the opportunity to talk with one of the frontline market traders that worked in the backroom. One question ask, why did we lose that sale to Austraila last week? One simple answer from trade technition, the difference in currency valuations. It was very marginal but we lost a big contract to deliver our grain that was sitting in the warehouse costing us inventory expense. Back to the boardroom to reconvene the meeting and listen to one of the agriculture marketing economist from the Land Grant U. who would not respond to the question concerning the currency exchange rate differences. Yes, then as today the talking heads of global marketing are always selective in their pronouncement. To often the socalled market experts use double speak so they will always be right and never be held accountable. Yes, to many experts are for ignorance and if we do not discuss certain issues they will just go away. Is it any wonder we have a global financial collapse? It is time to send a strong signal to the freetrade crowd, your way failed, we crashed, we burned, and Ignorance is NO escuse.
WTO has proven itself to have failed with respect to global trade oversight. Had it had the intellect and ability to manage its policies properly, this meltdown would have been avoided. WTO can point to its predecessor, but it’s moot. WTO needs to be restructured from the base up. A global currency board is needed.
No middle ground… Haha, I am shocked to find such bone-headed dogma-chasers around. I didn’t know ideological piety is a virtue?
Remember, China’s mantra is: Black cat, white cat, whatever catches the mice is the good cat.