Even Walser

Geithner on China's Currency Manipulation

It is about time! I cannot for the life of me understand all the deference to China. It is about time we realized that they need us way more than we need then. Their currency is dangerously undervalued and has been so for far too long. The effects of China's currency manipulation is now being felt through the credit crisis. Lets us not forget that had China not needed to purchase huge sums of dollar denominated assets in order to artificially keep the Yuan low against the dollar interest rates in the US would have risen long ago bring an end to the financial bubble that grew.

I understand many of the other arguments put forward on this blog re: China and the need for them to continue purchasing treasuries. I don't not completely buy the argument that they will not. To be honest I would rather our government prints the money than borrows it from a potential future adversary. The bottom line is China needs the US consumer to continue to purchase Chinese made goods in order for them to achieve growth targets. In order to keep their goods competitive in a global economy they must continue to purchase US treasuries or revalue and compete on a level playing field. Considering the Chinese attempts to rig the system I don't see why we would not take advantage of their position by running large deficits financed by them or inflate our way out of the recession. Either way as far as I see it we are in the strongest position and it is about time we started acting like it.