January 18th, 2011
In anticipation of the expected meeting tomorrow at the White House between President Obama and China’s President, ABC’s World News with Diane Sawyer reported this evening on the U.S. Government’s/Obama Administration’s efforts to “level the playing field" regarding trade with China. One of the topics of concern to the U.S. Government/Obama Administration is reportedly the continued devaluation of the Chinese currency.
If that’s not the proverbial “pot calling the kettle black”. I mean… does our government consider the news viewing public idiotic – or is it merely ABC News that believes the viewers of its news program to be stupid? After such a report that appears totally ignorant of the apparent truth in this matter or, at a minimum, is attempting to not reveal the entire truth of the matter, I likely would not believe anything ABC News reports on the economy.
The United States – via the Federal Reserve System – has been devaluing our currency for most of the last one hundred years with particularly concerted efforts to this end during the last several years [if not decades]. One only needs to review the price of gold [in dollars] for evidence of our devalued currency (or read more of my blog). In fact, I am fairly confident that the Chinese government has re-linked the exchange rate of their currency to the U.S. Dollar a few years ago – displaying that they are not stupid either (see notes below). Therefore, if the dollar continues to become devalued, so in turn will the Chinese currency. Furthermore, unlike the Federal Reserve System and the ‘U.S Dollar,’ to my knowledge the Chinese government was never warned against the escalation of a “currency war” by the European Central Bank (ECB) as was the Federal Reserve System warned of such a few months back by the ECB regarding The Fed’s continued devaluation efforts of the ‘U.S. Dollar’/Federal Reserve Note. (See: http://adamvernontrotter.blogspot.com/2010/10/fed-to-buy-back-government-debt.html )
What is of particular interest and displayed by stories such as these, is the limited amount of reporting on items such as the continued devaluation efforts of the ‘U.S. Dollar’/Federal Reserve Note, the previously [albeit minimally] reported down-grading of American government securities instruments such as U.S. government bonds (downgraded by the Chinese, at least - and downgraded by others too as I recall, reports of which I can not locate at the time of this writing), and the limited amount of reporting of issues such as the Chinese government’s efforts to protect its financial interests by linking the exchange rate of its currency to the exchange rate of the dollar.
So again I ask, is it the U.S. government (and the Federal Reserve System) and/or ABC News who consider the U.S. general public and network news viewers to be total idiots with absolutely no knowledge of economics and international monetary policy or do these sources of information merely prefer not to report the entire truth? As time has now shown by tonight’s newscast, apparently all of them (ABC News, The Fed, and the U.S. Government) must consider the U.S. public/populace to be completely ignorant of economics and the current realities of international monetary policy. Clearly we can now legitimately ask: Can we no longer trust our news media sources to report the entire truth of any issue to the nation? (A question I have put forth previously, btw. See: http://adamvernontrotter.blogspot.com/2010/05/is-nation-under-siege-could-we-trust.html)
I mean…., concerning truth in reporting by the media as well as the truth regarding the continued devaluation of currency, which is the free nation and which nation is communistic / fascist?
Adam Trotter / AVT
How Currency Choices 'Made in China' Have Big Impact on U.S. Economy
REPORT AIR DATE: Jan. 18, 2011.
Economics correspondent Paul Solman looks at the ongoing dispute between the U.S. and China over currency and trade. Amid its trade deficit with China, the U.S. wants to pressure the Chinese to let their currency, the renminbi, rise in value instead of pegging it to the dollar.
PAUL SOLMAN: For many years, China glued its currency to the U.S. dollar. But, starting in 2005, China loosened its grip, letting the value of the dollar fall against the renminbi, some 20 percent over three years.
But, in 2008, the world financial crisis hit, and China reglued the renminbi to the dollar. In the aftermath, China has recovered, while the U.S. economy limps along, our unemployment rate distressingly high."
http://en.wikipedia.org/wiki/Fixed_exchange_rate (yea, I know we are not supposed to quote wikipedia)
“…There are no major economic players that use a fixed exchange rate (except the countries using the euro and the Chinese yuan). … Another, less used means of maintaining a fixed exchange rate is by simply making it illegal to trade currency at any other rate. This is difficult to enforce and often leads to a black market in foreign currency. Nonetheless, some countries are highly successful at using this method due to government monopolies over all money conversion. This was the method employed by the Chinese government to maintain a currency peg or tightly banded float against the US dollar. …” Which, as is typical for wikipedia, this information is seemingly contradicted further down the webpage.
An of course, there are others that say the Chinese currency is pegged to a ‘basket’ of currencies; but I don’t know how current this article is.
What is the United States Dollar (USD)?
“…A significant recent development is the action of the People's Republic of China: the renminbi had once been informally and controversially pegged to the dollar (since the mid-1990s, at 1 U.S. dollar = 8.28 Y); however the peg was removed on July 21, 2005. Instead, China has a managed float against a basket of currencies. …”
US Credit Rating Downgraded
It was only a matter of time...
Leading Chinese credit rating agency downgrades USA government bonds