This blog is for discussing issues in our complex global economy.
Paul Krugman explains the Chinese currency manipulation effect.
China not only buys our debt, it buys its own excess dollars. Wow! That article is exactly we are learning with regards to an Equilibrium point and supply and demand. It was great to see that example in the real life.
I liked the Phillip guy’s comment to this article:
“Even if the dollar was lower, we have simply nothing to sell because we forgot for many years that growth is about factories and not consumer debts.” I tend to agree with this statement. We got stingy…
I think that the United States and China are benefiting because obviously the U.S. is in huge debt with China, yet at the same time China is has a surplus of our our dollar. So even though we are debt to China they are in a way helping us out while we still import and export. In the article though I did like how the writer did fully explain the graph. I felt that he should have explained his labeling and give a brief idea about supply and demand and equilibrium so readers who have not taken any economic classes could have a better sense of what he was talking about.
The graph in the article is effective to explain about Chinese currency, the price of dollar in yuan and the surplus, though I felt that more details need to be added to the article for people without much knowledge of economics. I learned that chinese action of delibertely keeping its currency weaker enables china to gain more from exports than from import and US is facing the disadvantage in trading with china.
It is nice to see and read about other country’s currency. How they come pair to our currency. The Chinese own USA. If the wanted their money back today then we would be in big trouble. China ends up have more political clout in our country then we do because nobody wants to piss them off.
I like how this article made it really easy to understand what’s going on with currency and the relationship the U.S. has with the chinese, currency wise. what anthony says is so true though. the chinese have so much on us right now that, it is ridiculous. The chinese really know what they are doing by keeping their currency low. There’s no way we could learn from that though because we have no money and are constantly borrowing…it’s depressing. random side note this was a really cool fact “Renminbi is the name of the currency; yuan is the unit. Think of sterling and the pound.”
This is kind of mind boggling to me. As much as we should love China because they do buy a ton of our debt and that really helps us out this is also super stingy of China. It is like they are waving a help flag at us and then blackmailing us. It is just really sad to see the way that the world is now. But to be frank, the United States needs to start being more economically smart so that it can get itself out of debt and pay for its own bills instead of depending on other countries.
China may look back on golden days when its policy to keep its currency weak was tolerated by US consumers who gladly spent money on cheap Chinese imports. Now is different. US consumers do not have the urge or the confidence to spend, so they no longer support the Chinese way of keeping its currency artificially low so that only Chinese producers would continue to gain additional benefits from the world market.
Fill in your details below or click an icon to log in:
You are commenting using your WordPress.com account. ( Log Out / Change )
You are commenting using your Twitter account. ( Log Out / Change )
You are commenting using your Facebook account. ( Log Out / Change )
You are commenting using your Google+ account. ( Log Out / Change )
Connecting to %s
Notify me of new comments via email.
Subscribe in a reader
Create a free website or blog at WordPress.com.
RSS Entries and RSS Comments