Renminbi (RMB)/Yuan Appreciation & Internationalization
- Thread starter supercat
- Start date
Lol. China actively manipulated its currency. All countries do.
The issue here isn't that China doesn't "manipulate" their currency. The issue is whether there is malicious intent, and what methods are used to "manipulate" said currency.
China did manipulate their currency. Many times over many years. China also didn't do anything wrong, and there is no real, neutral definition of what constitutes "currency manipulation".
What is a straw man fallacy?
I never mentioned anything about currency manipulation, nor did I mention anything about ethics of currency interventions. All I mentioned was that China doesn't have a policy of devaluation of Yuan which is true since 1994.
Every single currency, with no exceptions, is manipulated by their governments. Because the latter are the sole sources of said currencies and entities like Central Banks can affect currency values by hiking\lowering rates, increasing or decreasing money supply, etc. If you fear that "Chinese will decide to devalue Yuan", then you might as well have the same fears about any other currency - USD was held down by the 0% rates in the US and quickly rose in value when they started hiking rates.
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It's like some people think that food comes from stores and that things like college seats or semiconductors are non renewable resources dug out of the ground like oil is.
It's because it's so hard to envision building things in their societies that they would rather deny that building new things is possible.
Umm, you said,
CNY depreciated vs the USD at numerous points since 1994.
And there is nothing insidious about it.
In fact, US monetary policies are probably far more "manipulatory" considering the USD status as a global reserve currency.
FX trend lines going up and down are not considered credible evidence of a Yuan devaluation policy, no matter how many times the MSM and US treasury repeats that lie. Regardless your previous argument was still a straw man.
i'm generally a fan of a lot of Luke Gromen's post, here is another good food for thought
What made USD a global currency was the expansion of its use outside the USA starting with the 1920s. US banks were restricted from operating in other US states other than their home state back then so New York banks started expanding into South America and Europe. Mind you, the US was the biggest economy at this point for a decade. Especially after WW2 this process became faster. The rebuilding of Europe generated demand for credits which only USD was stable and deep enough to absorb. USD accounts and debt markets appeared throughout Europe. Ironically, the USSR jumpstarted this process. It decided to store its reserves in the UK in the form of USD (because they didn't trust the USA to not confiscate it), which led to large USD markets and availability in Europe almost immediately.
Since then world financial system was built upon the USD. Petrodollar is just a consequence of it, not the reason. Yuan replacing USD in sanctioned Russia does establish it as an alternative for international trade. Yuan's current expansion of use mirrors the initial USD expansion of the 1920s.