You seriously need an econ degree to understand this shit. wtf. Any smart people in /pol/ or what?
China Manipulates Its Currency—A Response is Needed
http://www.epi.org/publication/pm116/
Is manipulating your own currency some kind of immoral action or something? Why does anyone care?
If a manipulated currency poses a threat to USD then perhaps the US should look into manipulating its own currency.
>>75994218
from my limited understanding it exacerbates the already wildly out of proportion trade imbalance we have with china. we buy tons of shit from them and they buy almost nothing from us. by manipulating their currency it gives them an advantage or something......
>>75994218
because that would piss off the banks and the US would sink instantly, instead they will just get spitroasted by both the banks and china while increasing their ridiculous denbt until they are no longer relevant and become brazil 2.0
>>75994930
So you understand how China manipulates it's currency? Please explain it to me.
>>75994218
Not possible. Dollar is not backed by gold.
It's barely backed by oil.
>>75994218
US already manipulates its currency.
That's partly why the Yuan has depreciated- it was tied to the value of the dollar and the value of the dollar went down.
>>75996474
If you understand how China manipulates it's currency please explain it to me. Apparently you're also under the impression that the US does this. I would like to understand what you mean by that.
>>75996716
wouldn't /biz/ be a better board for such a question?
>>75994017
OP currency manipulation is not that hard to understand, especially in China's case. China is purposefully devauling its currency. This means they are purposefully make their crrency worthless than the US dollar.
This is so that it's cheaper to produce goods in China than in America. If $1,000,000 buys a whole factory in China, but only gets you a small brick and mortar store in America, then you will go to China to spend your money. If China's currency is worth more, then you couldn't buy a factory there for $1,000,000. therefore you wouldn't spend your money there.
Trump wants to stop China from devaluing its currency, so that we stop spending money over there. If it's not economically viable to invest there, then we will invest here.
>>75996155
>gold
Muh Ron Paul
>>75994218
Let's say I'm China trading to Canada.
I'm cheap so you consistently buy my goods.
I never buy your goods because you are too expensive.
Trade imbalance.
You manipulate your currency, so now we are both cheap. We no longer trade because you cannot afford any goods.
I decide to manipulate currency down to get you trading again. Because muh socialism I can afford free labour and inhumane work conditions.
You try to manipulate currency further down, you get riots from workers who don't work for free and protests against violations of basic human rights.
tl:dr
China can manipulate its currency because they can afford free labour and inhuman working conditions. Other countries such as USA cannot because they value human rights and freedom.
>>75997064
>fiat currency
yes yes good goy
>Jews getting outjewed by the chinese
kek
>>75994017
>like trying to complete the rubiks cube.
Which I can do in less than a minute.
Which is considered slow.
>>75997113
Maybe we should stop fucking trading with China altogether
>>75996799
that's not a bad idea
>>75997308
That's the best option but unfortunately not the most appealing to business.
>>75997113
>Other countries such as USA cannot because they value human rights and freedom
More like they value their seats in the government
>>75996716
They just print more money, that's all.
Lowers the value of the currency.
>>75997113
You need to be a lot more precise.
Do you mean they can handle more inflation? That's the only somewhat coherent connection I can see
>>75997308
It's not like people have a right to buy goods from anyone they want or anything
>>75997273
I don't know that this is actually a good move for the Chinese. It's probably just short termism / politics
>>75997778
>It's not like people have a right to buy goods from anyone they want or anything
They don't, I don't know where you even got that idea, in the US you can't even be in possession of Cuban cigars.
>>75997113
Well, I think this is a pretty good explanation, assuming its true of course.
>>75997708
Yes, that sounds more correct. EU forced me to rephrase
Yes EBUL CHINKS
While the JEWSA are plainly honest.
Yeah
...
No
.
>>75998036
Yeah surely you can't have more than one enemy at a time, what a ridiculous notion.
>>75997853
Government is the aggressor in that scenario
>>75997778
>They just print more money, that's all.
>Lowers the value of the currency.
That doesn't really make sense to me. They purposely inflate their currency? How does that help them?
>>75994017
Heard the Turd economist (yeah that's his name) say China sold some dollar reserves to buy their currency to prop it up.
They have a lot of dollars...
Everyone's economy is just a game
l e l
China does the human rights abuses so we don't have to, China does the fucking of their environment so we don't have to, China builds nigh fucking everything and makes it easier for small businesses to enter the market in the U.S., Once Chinese get rich they buy American products and move to America or invest in American companies. Except for all those crazy billionaires who buy up land everywhere else.
Exactly why is this a bad thing at all?
Now I'm not pro china. I mean honestly I'd rather we ditched the Monsanto and Walmarts and charged higher prices for goods actually worth purchasing but this is what the majority of America wants, plus it keeps the Chinese invested in other nations well being so they don't get any funny ideas like conquering the world or anything. R-right China? h-ha-ha
>>75994017
All federal reserve banks manipulate their currencies.
OMA, open market operations(google it), the central bank utilize intrabank traders who currently use 30+ billion dollars a day injected into the currency markets to keep the economy "stable."
The established currency manipulation standards is being violated by China who are utilizing their intrabank traders to compete for pure profit rather than for global stability. The establishment want central bank injections to be used as a method of stability and not extracting profit.
>>75998285
lures investment from around the world to take advantage of their human capital which they then use to their advantage to have a majority of physical matierials running through their country.
It sounds dumb but the truth is they don't keep their money in Chinese money, they keep it in investments abroad and US dollars.
So literally they are using their dollars to get our dollars.
>>75998285
It raises the relative purchasing power of the dollar.
Let's say one dollar used to buy one yuan.The value of the yuan falls so that one dollar can now buy two yuan. Chinese exports now seem cheaper.
>>75998892
How does having a worthless currency lure investments from around the world?
>>75998821
can you explain the stability thing? This sounds like a rabbit hole thing
>>75999000
aaahhhh. This is maybe the only coherent explanation I've received. That sort of makes sense. nice trips also britfag
>>75999072
because you Americans buy the chinese human labor on the cheap, then the profit is generated and turned into foreign dollars. The average worker gets shat on but the guy at the top wins. This is a very Chinese way of doing things culturally.
>>75999100
It actually was common knowledge not to long ago, before everyone became financially illiterate.
Basically, you buy and sell something. It locks up the value. This is called hedging. It's what creates stability. Hence the Hedge funds, they hedge(B&S) the market for corporations that want to purchase products in volatile currencies. Corporations need easy fixed prices, for long term contracts of foreign products. Sometimes prices are hedged at what is called benchmarks of a currency, where value gravitates to.
Now, central banks do this too, but, not with products, they do it with whole economies/currencies. They inject 30-60+ billions a day of buys and sells to stabilize the market. The whole thing can be controlled by less than 50 people.
>>75997113
Drumpf will increase import tax form China. Problem fixed.
>>75998892
Does it really increase US investment in China?
Won't it expand the trade deficit hence increasing the capital account surplus- hence more investment in the US?
>>76000067
oh, so free market doesn't exist then and its all rich corporations making the shot calls so they can secure profits?
I wonder why this is allowed.
>>76000543
dunno mang
As far as how China manipulates it's currency. All currency is a commodity like gold or oil or corn. Just like you can buy speculative profits on tangible commodities you can invest in currencies as traded on the stock markets of the world. One way that China manipulates it's currency is by buying investments in the US dollar (and other currencies). Just like when a stock becomes popular it's price/value increase. Making the dollar seem as though it is worth more than Chinese currency. With the communist hybrid government of China they can do this on a country wide scale. Free trade between countries allows the exchange of goods without tariff thus our government has no way to combat the inexpensive goods eliminating market for goods made in the US.
Free trade is a very Libretarian ideal and is easily taken advantage of by strong (big) governments. Taxation of imports used to protect workers and manufacturing in this country. The whole problem was created by tea party, small government anti socialist crazies, but hey at least we get cheap stuff on Walmart shelves.
>>76000840
>cheap stuff on Walmart shelves
You say that as if it doesn't matter.
Also cheap steel etc. is good for industries across the board.
We should buy up as much as we can right now and bleed China dry
>>76001205
I say we because it's the UK as well
>>76000744
Corporations exist to serve the whims of the elite, not vice versa. The elite can also profit off corporations not profiting.
The free market is just a meme to trick stupid labor scum into being wage slaves.
>>76001457
Free market isn't a meme if it correlates with higher living standards and the eradication of unemployment.
The function of corporations is irrelevant to the consequences.
Also the term wage slaves highlights your being a Bernie Sanders scum wastrel
>>76000840
we have a libertarian autiste here. He's so above left and right. He claims a hugely popular economic principle like "free trade" as a "libertarian ideal"
so edgy. so informed.
Free Trade just means American jobs get outsourced to 3rd worlders who will work for 10 cents a day.
>>76001932
I don't have alliances to clowns and colors in a political circus like you do; zombie cuck.
You have no idea what you're talking about. Economic growth is an arbitrary variable set by the IMF for a slow burn economy.
>>76001932
Well I just don't understand the point of whole hedgefund stabilization thing if you're literally controlling the market. Doesn't that mean its easier to make money? Is that the reason why they do the automated buy/selling? So they literally make fake transactions, just so they maintain the prices so no one else can fuck over the market I guess.
This is shit is over my head.
>>76002583
Free trade would allow me to find a way enslave you. Non aggressively of course.
>>75997175
gold is fiat
it's not even a commodity
it barely has usefulness
if you want to get down to it all commodities are fiat because they are intrinsically worthless until we assign worth to them
thinking gold is somehow more legitimate than any other currency/commodity is not only simplistic but immature
My friend explained it to me like this
>factory in china, owned my goverment, produces a phone
>phone is sold US for 500$
>Gov. pays workers in factory equal amount in Yuans and keeps 500$
>Uses it to buy land in Africa or invests in Europe
Would that be possible?
>>76003081
how is debt, mortgages, student loans, and credit cards not enslavement?
Well I guess enslavement means they have to feed you, this way they just take your money that you get from someone else.
>>75995997
Devalued currency = products produced in China are cheaper for other countries to import = Ohter countries import more from China, have less domestic production and less export = less competition for China in industrial production.
Currency manipulation basically just gives China the ability to attract all manufacturing from around to world to within its borders.
>>76003065
It really isn't hard to grasp.
When you sell, and prices go are going up, you lose
When you sell, and prices go are going down, you win
When you buy, and prices go are going down, you lose
When you buy, and prices go are going up, you win
When you buy and sell at the same time, it does't matter if prices go up or down slightly, because you neither win or lose. It stays the same.
The central bank wants a the vast majority of the market to remain the same. If the central bank was not buying or selling, but, actively taking a side in the market, that would be outside standard manipulation.
>>76003637
Asia likes US treasury bonds. Almost a 90% correlation. However, the 30year bonds are 40% less correlated.
>>76003416
nigga wat? have you even gone through high school level econ? rofl gold has intrinsic value, fiat currency doesn't because its just a piece of paper
>>76003819
Thank you. This thread has actually been very informative.
>>75996155
It's more backed by Saudis than by oil itself desu family.
China is removing industrial capacity from the US because it plans to strike the petrodollar and control oil in Africa, thus making America vulnerable to any demand.
>>76003725
>how is debt, mortgages, student loans, and credit cards not enslavement?
Sanctity of contract, does that mean anything to you?
The only thing that is enslavement in your pic is debt, if you're talking about public debt.
