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Lest the wacko free traders try to tell you that Asian currency
manipulation does not happen, you can quote the chief economist of the
National Bureau of Statistics in China. He was interviewed about Chinese officials' intentions for managing their currency:
“It is certain that the yuan will appreciate — the time frame and
magnitude of the adjustment is difficult to confirm at the current
time. We are busy studying this issue right now,” [Yao Jingyuan] said
in a telephone interview. “What I can say is that it will be dependent
on China’s overall economic environment and outlook.”
If "the market" determined the yuan's value, this quote could not
occur. If "the market" determined the yuan's value, the yuan
would have been going up fast because of China's double digit annual
growth rate. But "the market" has nothing to do with the
valuation. The government controls it.
The news article, in which this quote is found, highlighted a small
increase in the Chinese yuan's value. Wacko free traders will try
to tell you that currency manipulation does not happen, and even if it
does occur it does not matter. They say this in TV, wearing nice
suits, and people believe them because others in nice suits are not
invited onto the TV shows to contradict them.
The yuan
appreciation was 0.9%. Their multi-year strategy is clear.
The country cut the yuan's value by 40% in 1995, creating a continuous,
government caused sale on everything from China for 12 years
straight. Yes, FORTY PERCENT. Sometimes, in the past few
years, they have allowed the yuan's value to rise just a bit, just to
silence the critics, and give the wacko free traders some basis to
claim all is now well.
The strategy is like a bully
taking $100 from you because he can, then giving you back $2-3 once in
a while when you threaten to go to the authorities. The bully
then asks "what are you complaining about, I just gave you three bucks."
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