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The Empire Strikes Back: China Daily Warns About Currency War, Blames Dollar
Posted By admin On October 18, 2010 @ 3:40 am In World News | Comments Disabled
Oct 18, 2010
You didn’t think China was just going to do the rockaway and lean back, lean back, lean back. Nope – China Daily says: “A currency war is spreading as the dollar’s value against major world currencies has continued to decline in recent days” and calmly confirms what everyone esle knows: “It is the dollar that triggered the currency war. Seemingly a market move, the depreciation of the dollar is actually active.” Check to you, Tim Geithner and your currency manipulation report. What is remarkable, is how simply and accurately CD writer Li Xiangyang captures absolutely everything that Bernanke is trying to achieve.
From China Daily :
It is the dollar that triggered the currency war. Seemingly a market move, the depreciation of the dollar is actually active.
The move nominally aims to further drive down the interest rate in America to prevent the occurrence of a double dip. But it will affect the value of the dollar too, prompting the dollar’s devaluation. In light of the history low short-term interest rates in the United States, a further decrease in the interest rate will drive the flow of short-term capital toward markets of emerging economies, quickening the appreciation of their currencies.
Second, the U.S. government’s strategy to double its exports within five years needs the considerable depression of the dollar. For America, boosting exports is a must in the post crisis era, because it cannot pin its hope for economic growth on the prosperity of its real estate market and consumption based on borrowing money.
Even if the United States denies its motives to transfer their debts, it will unavoidably happen in reality.
Given a sluggish economy and huge amount of debts, driving the value of the dollar down is in line with America’s interests, both in short term and in long term. The international community ought to stay vigilant about the strong motive for active devaluation under the guise of a market-based move.
By Li Xiangyang, translated by People’s Daily Online
Who would have guessed those Chineses know exactly what the Fed is doing…
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URLs in this post:
 China Daily: http://english.peopledaily.com.cn/90001/90780/91421/7165351.html
 Full article here: http://www.zerohedge.com/article/empire-strikes-back-china-daily-warns-about-currency-war-blames-dollar
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