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Appreciating the Yuan hurts US more!

First, no country including US has the right to tell other countries to appreciate their currency. The era of ‘you’re either my puppet or my enemy’ is long past and Obama is still living in the past glory. He blames China for all our ills, as he cannot fix our problems.

Keeping the Yuan low actually helps US's consumers and US in buying wind turbines or HSRs from China at lower prices. Not to mention the huge loans from China. China does not want to withdraw the bad loans as they do not want to kill the goose that lays the golden eggs.

The major products of China and US are not the same, so there are no direct competitions. If we do not buy the products from China, most likely we'll buy same products from Mexico or India.  Hence, there is no job gain in US. These countries most likely are keeping their currencies low. $20 per hour just cannot compete with $2 per hour. China is better than the competitor in hospitability to business, good infrastructure, hard working, stable political system, potential huge internal market and educated labor.

Until China builds up its local market for its growing middle class, I do not see Yuan will appreciate by more than 10% a year, which could drive up a global recession.

A strong China is good for the world including US! China is just one part of the global economy. The other players are research companies from the west and the US, oil from Middle East and Africa, and commodities from Australia, Brazil… China only adds $4 assembly cost to the $150 iPod. Everyone benefits including the consumers in every country.

Our government tries to divert our attention from their failures in fixing our economy. China is a convenient scapegoat.  A trade war would force China to dump US debts and drive up a global depression.

It was an error US and other country asked China to depreciate the Yuan during SE Asia crisis. China is not that dumb to be trapped like Japan and Japan suffered from the lost decades. US did not gain competitiveness on Japan’s products even the yen has been appreciated 50%!

Disclosure: too many stocks to include