Categorized | China, Currency

The Competitive Double-Standard: The Olympics versus Global Trade


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The Competitive Double-Standard: The Olympics versus Global Trade

Hugh Campbell | July 20, 2012 | OpEdNews

We live in America, where the most cherished and most amazing thing about living here is that we have Freedom! Yes, that also means we have free reign to be as dumb-as-we-want-to-be in many areas. Part of the DAWWTB mentality is unwillingness on the part of many to admit that competition needs boundaries, to limit negative competition, which is some form of cheating or fraud.

Fortunately, the Olympics take place in an environment that acknowledges the need for boundaries, e.g., drug-testing to prevent negative competition. Unfortunately, most of the political-elite don’t acknowledge the need to limit negative competition in the area of global trade, as demonstrated by the last three U.S. Administrations giving 33 consecutive semi-annual passes to currency manipulator(s) since 1994 , including the most recent one on May 25, 2012.

Performance altering doping is a widely acknowledged form of negative competition in the Olympics. With global trade there is an unhealthy denial of the multiple forms of negative competition; which has been tolerated by U.S. voters, but would never be tolerated by Olympic fans. This denial prevents the depths of reflection necessary for an adequate and wide-spread understanding of the cheating/fraud taking place in global trade.

The media depicts the Chinese currency as being undervalued. A country that keeps its currency undervalued is analogous to a nation encouraging its Olympians to use performance-enhancing drugs, so they will be more competitive against other Olympians.

Since China’s currency is not a currency that trades in the free markets, China can only keep its currency undervalued on a relative basis versus other currencies, by keeping its trading partner’s currencies overvalued.

When China singles out one trading partner’s currency, like when it maintains a hard-peg to the Dollar, to manage its currency; its currency manipulation is solely focused on keeping the U.S. Dollar overvalued. China’s keeping the Dollar overvalued is analogous to China injecting U.S. Olympians with performance-reducing drugs, so they will be less competitive against Olympians from all other nations, not just Chinese Olympians.

 An overvalued Dollar orchestrated by China inhibits the competitiveness of all U.S. exports with all our trading partners’ products, not just against Chinese products. It also makes all trading partners’ exports to the United States more competitive against our domestic products. China’s keeping its currency undervalued, should be a direct concern to domestic producers and their stakeholders that compete with Chinese products. An overvalued U.S. Dollar is much more pervasive and should be a direct concern to all domestic producers and the stakeholders that compete with any foreign products either internationally or at home. It should also be a growing concern to all U.S. Federal, State and local taxpayers, because the competition-inhibiting effect of an over-valued U.S. Dollar reduces tax revenue and increases expenditures at all governmental levels.

Isn’t it time that U.S. elected leaders enforce our World Trade Organization (WTO) rights, on behalf of U.S. businesses, workers, shareholders and taxpayers, just as our Olympians’ rights are enforced?


One Response to “The Competitive Double-Standard: The Olympics versus Global Trade”

  1. robert says:

    Great analogy.


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