“The day they decide to float their currency you are going to get huge reversals of financial flows around the globe, which will affect all exchange rates, that’s why I compared it to a tsunami,” Costello said.
There’s nothing strange about wanting China to bear its share of a burden that the Western world is already bearing more than its share of. If the Chinese yuan were to go up the way it would naturally, then the Canadian dollar wouldn’t go up as much. However, hopes should not be pinned on China doing what we want; instead, we should stop being afraid of the “protectionism” bogeyman, and return Canada to being a country with steel mills and factories that employ ordinary working Canadians at union wages. Foreign trade should be something that is carefully managed to benefit all Canadians, instead of being allowed to get out of control and take jobs away.
It is quite obvious now that the world’s major trading powers, China and the USA, are currently engaged in a trade and financial war. They have been in a tug of war for the past 8 years (2001) since China entered into the world trade organization — something that should never had happened because of their total incompatability with democratic fundamentals built up in the Western world in the past 100 years– but was allowed to happen under the auspices of the Bush administration for purposes of “free trade.” It is also obvious that the tragic events of 9/11 were used as a smoke screen to cover up and distract people when China entered into the World Trade Organization. Yes, China entering the WTO was that big of a deal.
Everyone knows that communist China cheats by “artificially” keeping the yuan low. That’s a fact. And guess what? They follow a “communist” system. If everyone is so “sensitive” about calling them on that fact then why don’t they renounce their love of Mao and communism and change their name from the People’s Republic of China to something else?
Canada hurt by China’s fixed yuan: Carney
Says rising loonie weighs on recovery
Last Updated: Thursday, November 19, 2009 The Canadian Press
Bank of Canada governor Mark Carney says Canada is paying the price for China’s intransigence in moving to a flexible currency exchange.
The central banker says the world’s key economic powers need to co-operate in order to avoid future crises and to grow out of the current one.
If countries delay adjustment, he says, all countries suffer and growing strains could spur a disastrous spiral of protectionism both in trade and finance.
Carney says the immediate impact on China’s hoarding of foreign exchange reserves is that other countries, including Canada, pay the price through an appreciating currency versus the U.S. dollar.
In Canada, he says, the loonie’s rise will weigh down growth, estimating that the recent surge will wipe out all the positive developments from July in the long term.
The devaluation of the U.S. dollar has ignited talk of an alternative to the global reserve currency, but Carney says although that may come to pass, it will not alleviate the global imbalance problem. The solution, he says, is that all countries accept the responsibility that their domestic policies can damage other countries.
The Great US-China Romance
By Bill Bonner @ DailyReckoning
“You think you’ve got trouble,” Premier Hu Jintao might have replied to Mr. Obama. “Did you know that there are something like 200 million Chinese who still get by on as little as a dollar a day? Let’s face facts. You’re sitting there in Washington, comfortably talking about how much free health care and unemployment benefits to give the American people. We don’t have the time…or the money for those kinds of things. Too many Chinese people. They don’t earn enough to afford the kind of cradle-to-grave bribes you give your people. We have to keep them working; there’s no other way.