Thursday, December 15, 2011

Why don't we reduce the value of USD instead of increasing RMB's value?

I don't think it is possible to force China to screw their own economy by increasing RMB's value, so why don't we reduce the value of USD?|||China has their currency pegged to the USD so a drop in the dollar leads to a corresponding drop in their currency. Also, while playing hardball with China may be justified this would distort exchange values with other countries and the U.S. who have allowed their currencies to appreciate and depreciate relatively freely. Also, printing more notes wouldn't do it because money in the Federal Reserve doesn't mean anything. That money would have to be put out in consumers hands though open market operations by buying treasury bonds and encouraging bank lending.|||Sorry, we cannot control the Yuan. Only the Chinese government can do, and that's called manipulation.

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