U.S. Treasury Secretary Timothy Geithner said on Saturday he was delaying an April 15 report on whether China manipulates its currency but pledged to press for a more flexible Chinese currency policy.Translation: Cower in the corner so you don't piss off your lender. Make sure you release the news of your cowardice on the weekend, when your compliant Media Scribes aren't at work.
China, shockingly, is acting in its own best interest. They have policies and programs that are in place for the well-being of their citizens. By keeping their exchange rate at a level which is beneficial to China, they are able to sell more of their products to the rest of the world.
Their policies make their exports less expensive for the rest of the world to buy, and imports more expensive for the Chinese to buy. The result of the high import costs means that the Chinese have an incentive to produce more of their own goods - employing even more Chinese citizens.
What a concept: A government acting in its citizen's best interests.
Not wanting to just genuflect to our lenders, Timmy wants to whine about it as well -
Geithner implied that China's current policy was unfair to others, citing Germany and Japan's efforts to spur their domestic demand while maintaining floating exchange rates.Translation: Everyone else is ruining their currency - you should, too! Why should your, "surplus economy" be able to grow when all of ours are contracting?!
"Surplus economies with inflexible exchange rates should contribute to high and sustained global growth and rebalancing by combining policy efforts to strengthen domestic demand with greater exchange rate flexibility," he said.
"This is especially true in China," he added, noting that China managed to come through the financial crisis that wreaked havoc on other countries' economies while maintaining a 9 percent rate of economic growth in 2009.
Geithner should institute policies that punish China for manipulating their currency, and impose sanctions that would be beneficial to the US. Congress should rise up with One Voice and pass laws that would teach China to never mess with us again [I actually chuckled out loud when I wrote that].
But of course, they won't. They know that China has us by the throat (or somewhere lower). We've practically asked them to do so.
Our policies of spending much, much more than we "bring in" have placed us at the mercy of countries like China. The threat of them cutting off our credit line is causing us to take actions which are not in the country's best interest.
When China says, "Jump," our only reply can be, "How high?"
To save face, I'm guessing we'll issue some watered-down proclamation that is accompanied by a vigorous finger-shaking to the East. We'll impose a few sanctions on some fringe products. The administration will set up photo-ops with a small business owner in Toad Suck, Ark., who will share glowing reports of how his state-of-the-art dehydrated water business ("Just add water, and you've got.... water") plant was saved from the ravages of the Chinese.
And then little else will change. You don't bite the hand that keeps you fed.
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