Comments on: Who’s winning the currency wars? http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/ Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Barts http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4225 Sun, 17 Oct 2010 23:52:56 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4225 The US is relying too much on monetary policy and not enough on fiscal policy to solve our problems. This is bad for us and the world.

The US is the world reserve currency. There is something called the Triffin paradox. In the fifties, Dr. Triffin pointed out in the fifties that U.S. was at a perpetual competitive disadvantage because of its role as the world’s reserve currency. The US was printing dollars to support world growth but trying to keep the dollar pegged at $35 to an ounce of gold. Everyone knew this way unsustainable. When Nixon took us off the gold standard in the early 70s, the dollar remained the reserve currency. Friedman thought we wouldn’t be able to run up massive debt -what David Stockman called the $8 trillion mistake–Friedman was wrong. The US became the consumer of last resort for the world.

The system has been broken for years -US has lost entire industrial sectors because its impossible to compete against economies that have massive price controls on all their exports, in the form of discounted currencies. However, this was offset by the ever expanding extension of credit to Americans.

We reached the top of the credit cycle in 2008. Now Bernanke is trying to maintain price stability, due to the extraordinary amount of debt in the US.

Monetary policy however is starting a new credit cycle overseas as banks lend and speculate in foreign markets. That’s the rooot cause of the currency devaluations -too many dollars being sold to buy their currencies.

The rest of the world needs to pressure the US to use fiscal policy to create jobs and accept that the US has to have some kind of trade restraint system to offset, the negatives of being the reserve currency. If we don’t do this, we are going to have volatility and social problems which will escalate into world war as food, water and energy shortages take hold. We also need to globally, from the ground up focus on sustainability.

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By: Haung http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4216 Sun, 17 Oct 2010 15:45:16 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4216 At the end of the day,every one is a loser. The midterm election and political competitions have pushed the urgently needed efforts to improve the economy off the table while the economy sly backward draging employment along its slipery path. It appears that everyone is too busy holding the blame China banner that no-one is putting thewir mind to work on fixing the mess. Defending a handfull of trade groups in return for continued political supports will ultimately prove to be foolishly costly to the multitudes and make no contribution to the groups meant to saved(these trade group’s inability or unwillingness to adapt to the change economic environment-let them go down and start putting resources on sustainable industries).

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By: terrymac http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4169 Fri, 15 Oct 2010 02:59:43 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4169 These are the final days of faith-based paper currency. As Voltaire put it, the value of paper currency tends to fall to the value of paper, which is zero. You can find $100 trillion Zimbabwe notes on ebay for next to nothing. Other forms of paper currency will become curiosities in a few years.

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By: bkhjon http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4165 Thu, 14 Oct 2010 22:42:07 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4165 Cheap currency has its consequences. It reduces the standard of living. Now Americans have to pay more for the same goods including gas.

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By: Bally http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4160 Thu, 14 Oct 2010 16:23:59 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4160 This is law of nature “what goes up must come down”.

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By: antonius2618 http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4126 Wed, 13 Oct 2010 18:56:57 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4126 Why are we even doing business with China, when they’re a communist country? Isn’t that why I can’t have Cuban cigars???

Our standard of living has continually been deliberately declining. When will my fellow Americans get their heads out of their backsides and wake the hell up?? The Federal Government doesn’t work FOR the citizens of this country…it works for a select few business owners and of course corporations who outsource cheap labor.

And if you REALLY want to end the debasement of our money…END THE FED. This unelected, private banking cartel is a criminal organization that has been stealing from you since 1913.

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By: doctorjay317 http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4115 Wed, 13 Oct 2010 06:45:28 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4115 For Neander

“What is wrong with moral integrity?”
Ask the government and Wall Street? You will have a field day.

For QuePasa

You have my vote if you run for President of U.S.A.
The Administration has no time to deal with all that you pointed out. They are just there trying to win the next election.

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By: robb1 http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4107 Wed, 13 Oct 2010 02:12:16 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4107 I have been working in the computer industry for 25 years… we thought them how to do it (cheap) and now they own it.. same for any other business… and I still see the same mistake is repeated again and again. With the excuse of cheap labor we still keep training them to new and innovative technologies, slowly, or I would say: “rapidly”, loosing our edge. Quality of life will go down in the US while all emerging market will benefit. Do we have room at least to regain a fiscal advantage and support business… hmmmm … nope.. so, we will not have any skilled immigrants either… quite bleak scenario.

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By: QuePasa http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4099 Tue, 12 Oct 2010 15:07:33 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4099 There is no quick fix to this problem. Transfer of technical knowledge has accelerated the relocation of industrial manufacturing. China has low cost labor, the latest state of the art manufacturing machinery, the technical knowledge we provided and oodles of our money. The west has helped China build their industrial juggernaut and major multi-national companies around the world now rely on Chinese manufactured products & components to make a profit and pay dividends. Just because they are now the lowest cost bulk manufacturer of almost everything, we can’t say “Oops we need a do-over. Giving you all that technology was a bad idea”. There is no way to turn the clock back. Greed and a lust for low priced goods created this problem. The Yuan will slowly rise in value as the standard of living improves outside of the main cities in China. They will continue to expand with or without the approval of other counties. China will sell more and more of their manufactured products to developing countries to reduce its reliance on sales to USA and Europe. The west have dug themselves into a huge “debt hole” that will result in a lower standard of living in general and high unemployment. We need to accept the reality of the situation. The USA is printing money in an attempt to patch over the problem. That is also currency manipulation. Too late to single out China as a threat to world stability. A trade war and tariffs will make the situation worse. What if, as retaliation, China decides to more aggressively reduce its purchase of USA Government securities. By choking off imports from China that scenario will be self-fulfilling. And that will result in even higher unemployment.

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By: Neander http://blogs.reuters.com/breakingviews/2010/10/11/whos-winning-the-currency-wars/comment-page-1/#comment-4092 Tue, 12 Oct 2010 10:51:45 +0000 http://blogs.reuters.com/columns/?p=4287#comment-4092 Governing wisdom does not have a heart or a mind for new circumstances, and so the assumption that protectionism is BAD might just be a case of pure foolishness.

A protected economy that promotes innovation, true and genuine market economics where every individual is treated as a free thinker, might just be what the USA needs. What is wrong with self-sufficiency? What is wtrong with moral integrity? Circumstances are indeed calling for ecomomists to upgrade themselves with some phylosophy. The West is a place that has its roots in Greek idealism and it will not follow the path of the East without developping fantastic hatred aimed at this purely vicious pragmatism.

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