Posted on 26 October 2012 by Michael Stumo.
Ian Fletcher, CPA’s Senior Economist, spoke before an organization called The Social Contract on September 30, 2012. While the group focuses on immigration issues, Fletcher explained the economics of the trade deficit problem and how to solve it. This is a good video presentation worth watching.
Wall Street Seeks Dodd-Frank Changes Through Trade Talks
Why the U.S. is not a currency manipulator…
China to reduce Government Role in Economy?
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European Parliament Moves to Limit Scope of Eventual U.S. Trade Deal
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Must read on currency
Deficit Fixed. Now Fix The Job Gap, Wage Gap And Trade Gap
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Down with subsidies
EconomyInCrisis.org
Facebooked, forwarded to everyone I know and sent to my congressman.
At the 24:20 mark, Ian explains how China manipulates currency. He skips the last step, which is very important. Ian explains China’s “surrender requirements” which compel Chinese manufacturers to deposit their dollars with the Chinese Central Bank.
At that instant, China informs the depositor what the exchange rate will be that day. That rate is whatever the bank says it will be. The Central Bank literally sets the exchange rate right there.
Yuan are not widely traded on global currency markets, unlike the currencies for most other countries. No other market exists for setting the yuan-dollar exchange rate.
Simply put, China manipulates its currency because it can!