Posted on 10/08/2010 2:54:51 PM PDT by mojito
China’s currency manipulation represents the largest protectionist measure maintained by any major economy since the Second World War. China has intervened in the foreign exchange markets by an average of $1 billion a day for the last five years, buying dollars to keep them expensive and selling renminbi to keep them cheap, building a gigantic reserve of $2.5 trillion in the process. Largely as a result, the renminbi is undervalued by at least 20 percent relative to economic fundamentals. The largest trading country in the world is therfore subsidizing all exports by at least 20 percent and imposing an additional tariff of at least 20 percent on all imports.
(Excerpt) Read more at economix.blogs.nytimes.com ...
Chinese tariffs are pretty stiff, as well. Several years ago, I heard from a guy in the biz that seafood going to China incurs a 100% Chinese tariff, whereas seafood coming to the US from China incurs a 3% American tariff. If the US carried out tariff reciprocity with China, the odds are that most imports would be coming from places other than China.
What? Why does the US put up with such naked protectionism without retaliating?
The Federal reserve has devalued the dollar’s true buying power (as compared to Gold) by *300%* - reducing its buying power to one third of what it was in just five years.
Imagine what would have happened if the Chinese hadn’t brought Dollars like they were going out of fashion.
Actually ... I think we're all about to find out. Because they've stopped buying them.
There is no bigger manipulator of markets than the Federal Reserve.
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