
U.S. Designates China as Currency Manipulator - anilshanbhag
https://www.wsj.com/articles/chinas-currency-weakening-escalates-trade-war-11565027431?mod=rsswn
======
chibg10
One thing that I think is getting lost in this discussion is the role of
intent on currency manipulation.

Switzerland has the strongest currency in the world due to the country's
reputation for governmental and financial stability. This makes Swiss labor
extremely expensive for reasons mostly outside of their control, and the Swiss
government has tried (and largely failed) to remedy this. Technically, this is
devaluation but given the circumstances and Switzerland's relatively small
footprint in the labor market, it's understandable and fairly benign.

The Fed cutting interest rates in 2009 had the effect of weakening the USD
relative to what it would have been. But the intent of the policy was not to
steal a share of the export market, but rather to provide stimulus during a
deep recession.

Japan has been in ultra-low growth and ultra-low inflation for decades. To
fend off the threat of deflation and economic contraction, it ran the printing
press and cut interest rates. Which, again, devalue the currency but stealing
export share is not a major intent.

I'm not sure what the appropriate definition of "currency manipulator" should
be but, while China's currency policy history is a strange and variable beast,
yesterday's devaluation was clearly a different case than those above. And
depending on how far you want to go back in history, there's an argument that
the intent of some previous Chinese devaluations were aimed primarily at
increasing its relative attractiveness as an exporter.

Its most recent history until yesterday was to prop up the RMB, so it may be
fair to argue that now is a strange time to label them a currency manipulator.
Given yesterday's events and their history in this area though, it's hard to
make the claim that their currency policy is altogether ordinary either.

~~~
bluetwo
If having two different exchange rates -- "offshore" and "onshore" \-- doesn't
say currency manipulator, I don't know what does.

~~~
cetico
Every currency has onshore and offshore rates. For example, you can buy
dollars or Eurodollars, which is simple US currency kept offshore.

Eurodollars have different exchange rates because they don't have the reserve
requirements from the Fed. i.e: it's less regulated.

The RMB has a heavier regulation whereby the exchange rate isn't allowed to
fluctuate. This does increase the difference in value for the onshore and
offshore currencies.

But having that distinction does not by itself make it a currency manipulator.

~~~
rihegher
Where can i buy eurodollars?

~~~
latchkey
I didn't know much about eurodollars until I used google and read this
article, which seems quite good.

[https://www.investopedia.com/articles/active-
trading/012214/...](https://www.investopedia.com/articles/active-
trading/012214/introduction-trading-eurodollar-futures.asp)

------
rossdavidh
So, really, is there any doubt that this is true? China's currency exchange
rate has been abnormally stable for a long time, and the Obama, Bush, Clinton,
Bush, and Reagan administrations all knew it was the result of currency
manipuliation. They just found it politically unpalatable to admit it out
loud.

The real question would be, why is the U.S. finally admitting this out loud?
1) amping up a trade war 2) decoupling U.S. economy from China 3) trying to
leverage China into doing something differently, perhaps regarding North Korea

Some of these, of course, would interfere with others, for example you can't
use it as leverage in #3 if China thinks you'll keep pursuing it anyway no
matter what, due to #1 or #2.

~~~
havetocharge
US decoupling itself from China would have an avalanche of effects, including
huge inflation on most consumer goods, and outright product shortages. China
is also a huge foreign debt holder, and if presumably no longer a buyer due to
decoupling, will send US interest rates skyrocketing.

~~~
empath75
The us decoupling itself from China would be an unmitigated disaster for the
us as China would align itself with Russia.

~~~
thrwayxyz
Russia has the population of Nigeria and the GDP of Italy.

The cold war ended a while ago. Worrying about them today makes about as much
sense as worrying about Autria in 1930 because Austrohungaria used to be a
world power.

~~~
chrischen
They have a large nuclear arsenal.

~~~
milchek
Which might not mean as much as you think, thanks to the doctrine of Mutual
Assured Destruction
([https://en.wikipedia.org/wiki/Mutual_assured_destruction](https://en.wikipedia.org/wiki/Mutual_assured_destruction))

~~~
AstralStorm
That only works as long as you have targets worth destroying. China has a lot.
US, fewer... Russia, we do not even know the targets.

------
dnprock
China have been manipulating their currency before this week's drop. They use
USD to buy CNY to prop up CNY exchange rate. If they stop buying CNY using
USD, the value of CNY would fall (happening now). So China is technically no
longer manipulating their currency.

Why are they doing this? My guess is to respond to trade war tariff. The US is
manipulating USD through Fed interest rate. The Fed lowers interest rate to
prop up borrowing and economic growth. I think China has figured out a way to
deal with the situation. They will adjust the USD-CNY exchange to prop up
their own economy.

This trade war is turning into a silly cat and mouse game. China is not making
a deal. They have ways to get around tariff and TPP. War is about deception.
The US needs some sneaky attack if it wants to win.

~~~
zaroth
(Don’t reply to temp comments because then I can’t delete them!)

~~~
dnprock
Corrected.

------
rdtsc
I have no idea what all this means so tried to read
[https://en.wikipedia.org/wiki/Currency_manipulator](https://en.wikipedia.org/wiki/Currency_manipulator).

Found it interesting that "Switzerland have been manipulating their currency
more than China since 2009 and Germany and South Korea since 2014"

Still it is not clear what that means in terms next steps. Will there be more
tariff increases or sanctions? And then China will devalue their currency even
more. So where does it end?

This is US Treasury report from 2017 I started looking through:
[https://www.treasury.gov/resource-
center/international/excha...](https://www.treasury.gov/resource-
center/international/exchange-rate-
policies/Documents/2017-04-14-Spring-2017-FX-Report-FINAL.PDF)

The last paragraph explained the logic a bit more:

> The United States cannot and will not bear the burden of an international
> trading system that unfairly disadvantages our exports and unfairly
> advantages the exports of our trading partners through artificially
> distorted exchange rates. Treasury is committed to aggressively and
> vigilantly monitoring and combatting unfair currency practices.

Granted it's published by US Treasury. I imagine the Chinese government sees
the picture very much differently.

~~~
rolltiide
Okay, no, Germany can't manipulate its currency as they don't have their own,
they use the Euro. Germany does have large influence over Brussels being the
economic powerhouse of the Eurozone currency union, and the European Central
Bank is in Frankfurt but really accountable to no-one, being led by an Italian
man from Goldman Sachs.

And yes, these 'currency manipulator' designations are a point of political
convenience and are not evenly applied.

Monetary policy for the last decade worldwide has been outright currency
manipulation and market interventions using devalued currency.

This excess currency has fueled bubbles in all markets: Rental, housing,
stocks, venture capital, startups, art, crypto, government bonds, corporate
bonds, junk bonds, collectibles, you name it.

~~~
Phil_Latio
> Okay, no, Germany can't manipulate its currency as they don't have their
> own, they use the Euro.

But they use the Euro as an umbrella that doesn't behave like a single
currency for Germany would. While implementing the Euro they put massive
pressure on wages while other EU countries kept increasing wages. Germany is
violating export-surplus rules of the EU, but no one seems to care.

[https://upload.wikimedia.org/wikipedia/commons/e/ef/Balance_...](https://upload.wikimedia.org/wikipedia/commons/e/ef/Balance_of_trade_in_goods_and_services_%28Eurozone_countries%29.png)

~~~
jchb
Actually the German surplus has been brought up for discussion many times in
the EU parliament. A trade surplus of over 6% triggers a so called IDR, one EU
acronym among many, which means (Macroeconomic) In-Depth Review. If the review
shows an excessive balance, that triggers the EIP. Excessive Imbalance
Procedure!. If a country fails to follow the recommendations coming out of the
EIP, that can in theory lead to sanctions, including fines. You can read the
last IDR on Germany here:
[https://ec.europa.eu/info/sites/info/files/2018-european-
sem...](https://ec.europa.eu/info/sites/info/files/2018-european-semester-
country-report-germany-en.pdf) This IDR concluded that a EIP was not
necessary. So far an EIP has never been launched by the commission.

Whether this system was designed to ensure Germany is never sanctioned, or if
it is simply a huge slow-moving bureaucracy, I leave as an open research
question ;)

~~~
Phil_Latio
> Actually the German surplus has been brought up for discussion many times in
> the EU parliament.

Has it? I don't follow that clown show. Looks like Germany has the power
within the EU to ignore such issues while bullying other countries into
following the rules "we all agreed on". Naturally this topic is a total taboo
in Germany. The worst excuse I heard so far was: "Yes, we profit the most and
other countries may suffer in economic terms. BUT the EU as a whole brought so
much more to these countries!"

> This IDR concluded that a EIP was not necessary

I know that the rule itself is 6% for surplus and 4% for deficit (?!)... So
thanks for the link but I won't read it, I don't care why EIP was not
necessary for whatever opinion. I just don't take the EU serious.

~~~
marmaduke
> we all agreed on

I have a German boss who uses this rhetoric frequently, which is usually code
for 'shut up and do what I say'

------
qwerty456127
Isn't being able to manipulate their currencies exactly the reason countries
maintain currencies of their own? Don't other countries like Japan and the USA
manipulate their currencies routinely?

~~~
Symmetry
Generally by "currency manipulation" people don't mean manipulation of the
value of the currency in general but manipulation of its value with respect to
foreign currencies in particular. So if the US just prints money to combat
deflation that isn't currency manipulation but if it used all the money it
printed to buy Yuan that would be. But really the whole public discourse
around the topic is pretty confused. In the long run trade balances are
governed by savings rates and its hard to keep things out of equilibrium in
the long run.

------
ptah
>Treasury uses three criteria to apply the designation: actively intervening
in their currency markets, having large trade surpluses with the U.S., and
having large overall current-account surpluses.

Monday’s action by Treasury is mostly symbolic, requiring the U.S.
administration to consult with the International Monetary Fund to try to
eliminate the unfair advantage the currency measures have given a country.

Does that mean it is only "unfair" if it negatively affects the US? such a
definition of "fair" means that no country should be allowed to do better than
US

~~~
oblio
Is there a country of comparable heft that is allowed? Do you remember when
Japan was rising? There was definitely a lot of anxiety on the American side.

------
drawkbox
As the reserve currency, the USD has some weight on it due to that position,
can't just manipulate it like others can as easily except printing more [1].

Being the reserve currency, it was more fair when everyone was pegged to the
dollar so at least manipulation was in check a bit. Both the unpegging and the
free trade agreements put more pressure on the US for being a reserve
currency.

Ultimately, the USD is too high and it is the root of lots of the problems
with jobs, exports/imports and the trade imbalance, national debt as the
reserve currency is a safer investment due to it not being as easy to
manipulate due to the sheer size of the supply. Now that we are a debtor
nation rather than a creditor nation, the problems are more evident [1].

[1] [https://www.forbes.com/sites/bobmcteer/2013/09/05/reserve-
cu...](https://www.forbes.com/sites/bobmcteer/2013/09/05/reserve-currency-
status-a-mixed-blessing/#244e4bc14e59)

~~~
blunte
What about quantitative easing via banking regulations?

------
kasey_junk
The best part of this is that they are being called a manipulator for not
shoring up their currency artificially.

~~~
ajross
It's manipulation. The RMB has been artificially fixed for decades for
targetted economic/political reasons. It's being adjusted now not so that it
can seek to a market value but to target another specific value for
political/economic reasons. No one argues this. The PRC manipulates it's
currency. It always has. It certainly doesn't seem likely to stop.

That said: this is what trade wars look like, folks. If we didn't want to
fight in one we shouldn't have started it. The currency-manipulated status quo
of the past two decades or so has lifted hundreds of millions of people out of
poverty and made the world richer than it ever has been.

But no, someone's gotta score domestic political points based on a poor
understanding of economics and some intuition about how to make a good
populist argument.

~~~
seanmcdirmid
If the RMB was left to find a market value, it would fall way below 7 to
probably 7.5 or even 8 something. Yes, it is being manipulated, but in the
other way that Trump says it is. The Chinese are simply running out of the
dollars needed to keep manipulating it so that it stays stronger than 7!

The simple irony is that if the Chinese were just to give up manipulating the
RMB all together, Trump would be even more angry.

Everyone manipulated, the Japanese and Koreans do it, even the Swiss do it.
The only thing that the Chinese do differently is have non market exchanges
and currency controls on convertibility. (And their central bank is much less
independent than the fed).

~~~
internet_user
There is a certain criteria, and neither Swiss, Koreans, or Japanese meet that
criteria.

~~~
AnimalMuppet
Could you be more specific?

And, did China meet the criteria before this latest move?

(And, minor nit: criterion is singular. Criteria are plural.)

------
markvdb
3% stock market movements set in motion by the US president alone. "Great"
insider trading potential. Have someone set up the right derivatives strategy
and bam: instant millions.

I couldn't convince myself to immediately write that idea off as utter
nonsense.

Anyone with more relevant financial experience? Can you reassure me this would
be difficult to pull off? Or would you have to confirm this would be difficult
to catch?

EDIT: Let me try put this in an even more neutral way. Let's say one knew down
to the minute when the entire US and EU stock markets were going to sustain
substantial losses. How much value one could siphon off without triggering too
much suspicion? Surely market depth and trade volume must offer at least order
of magnitude hints about that?

~~~
busymom0
Even IF this were the case, Insider trading has been allowed in congress for a
long time. There was the STOCK act passed in 2012 to prevent it, the very next
year it was amended to get rid of strict disclosure requirements.

Nancy Pelosi for example (speaker of the democrat majority house) is worth 140
million dollars. One has to wonder how a life time politician has managed to
get that much wealth.

~~~
sumedh
Chris Collins would have been a better example instead of Pelosi.

~~~
busymom0
Why?

Chris is listed at 23.83 million whereas Pelosi is at 140 million.

[https://www.msn.com/en-us/money/markets/the-25-richest-
membe...](https://www.msn.com/en-us/money/markets/the-25-richest-members-of-
congress/ss-BBmDr23?fullscreen=true?i10c.ua=1#image=7)

~~~
edaemon
Collins was arrested and charged with insider trading in 2018:
[https://en.wikipedia.org/wiki/Chris_Collins_(American_politi...](https://en.wikipedia.org/wiki/Chris_Collins_\(American_politician\)#2018_criminal_charges)

------
opportune
I'm not an economist, but my impression is that if the Chinese currency is
allowed to float, the major effect is that they would begin to import more
goods from abroad and that their exports would be less competitive. But what
would China import that they are not already importing?

Personally I would rather see the rules about local ownership of businesses
open up so that foreign people can actually freely do business in China. Now
that China is not a super poor country anymore, it seems fair. And this way
they can keep their currency devalued as there is still a way for trading
partners to use it to their advantage, while the majority of the advantage
remains with China

------
xster
The entire premise of the post-Bretton Woods neoliberal world US currency is
based on an agreement with the Saudis to sell oil in US dollars for military
support and on threats to bomb countries who sell oil in non-US denominations.
And China is the currency manipulator.

~~~
ideasRgood
And this is why we have Bitcoin.

Or if you don't like that, pick a different non government asset.

~~~
xster
Well my point is essentially that unless Saudi Arabia is willing to sell you
oil for Bitcoins or that Venezuela wouldn't get 'humanitarian regime changed'
for selling oil in Bitcoins, it's all kinda moot.

------
peterwei87
>Mnuchin had warned in June that China could be designated a currency
manipulator if it stopped intervening to prop up its currency.

[https://www.bloomberg.com/amp/news/articles/2019-08-05/u-s-t...](https://www.bloomberg.com/amp/news/articles/2019-08-05/u-s-
treasury-department-labels-china-a-currency-manipulator)

~~~
9nGQluzmnq3M
That statement bears repeating with italics for emphasis:

"China could be designated a currency _manipulator_ if it _stopped
intervening_ to prop up its currency."

In other words, if China stops manipulating its currency to tilt the table in
favor of the US, the US will designate China a manipulator to reflect the fact
that they are no longer manipulating it!

------
simula67
China burned through almost $1 trillion in US treasuries defending the peg
when the Yuan depreciated last time[1]. They were "manipulating" the currency
to make it stronger.

This time they did nothing, and they are being accused of being a currency
manipulator. It is insane.

[1] [https://www.scmp.com/business/banking-
finance/article/207131...](https://www.scmp.com/business/banking-
finance/article/2071318/chinas-holdings-us-treasuries-sink-2016-prop-yuan)

------
tempsy
Stock futures down another 2%.

Amazing how much money one can lose in a matter of days. Stomach churning.

~~~
xwdv
Not even days. I lost $24k today, and $60k since last week.

The thing that keeps you calm though is that sometimes it’s amazing how much
money you can actually make in a matter of days, or a single day.

~~~
eanzenberg
This means you have about a million dollars in stock investments alone, which
you put you in a different class.

~~~
anonoholic
That would keep me calm!

I'm pleased to report though that I lost nothing, since that's about how much
I have.

~~~
damon_c
Get something started ASAP.

I left a job when I was 28 with a depressing $21k in 401k. After sitting there
for 16 years, it's now... big enough where it lost almost that much this last
week.

Compounding... really... works...

------
NicoJuicy
China has started invading Europe through Tsjechie also.

Just read a disturbing dutch article and Europe should join the US.

I wasn't sure before, but I'm sure now.

Here's a small report of the EU :
[https://www.europarl.europa.eu/thinktank/en/document.html?re...](https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI\(2018\)625173)

Yeah, it's disturbing and it doesn't even contain all the info...

~~~
meesles
Seems like FUD without a credible source, can you link something? Plenty of
dutch readers on HN.

The article linked is referencing the unfavorable economic terms of China's
Silk Road project towards developing nations' economies, which has been
written about and is plenty concerning on its own.

~~~
NicoJuicy
[https://www.nrc.nl/nieuws/2018/07/05/china-krijgt-meer-
grip-...](https://www.nrc.nl/nieuws/2018/07/05/china-krijgt-meer-grip-op-
europa-a1609076)

This was the article I originally mentioned

------
coldtea
Well, that's rich. Especially since dollars (which the US has "license to
print", manipulate, change interest rates, subsidize whole industries, etc.)
have been forced as the world's trade currency for close to a century...

~~~
blunte
I was with you until the word "forced". Who forced anyone?

~~~
coldtea
Α 10000ft gorilla of a superpower, meddling in foreign countries, toppling
governments, spying, downright invading to "bring democracy", blackmailing,
buying foreign politicians and influence, maintaining bases all over the
world, playing one neighbor country against another for support, forced them.

It might not register that much on the giving end, but it's common knowledge
on the receiving end...

~~~
blunte
All those actions you list are sadly true, but they don't really force anyone
to use a specific currency. Now if a country was invaded, its government
replaced, and its currency literally replaced, then that would be forcing.

~~~
llamaz
you can call it whatever you want as long as we're on the same page

------
joezydeco
China can outlast the US on this one. Next up, let's crash the price of oil
and flip off the Iran sanctions:

[https://www.cnbc.com/2019/08/05/brent-and-wti-price-could-
cr...](https://www.cnbc.com/2019/08/05/brent-and-wti-price-could-crash-if-
china-buys-iranian-oil.html)

~~~
hugh4life
China would have a lot more room to move were the Hong Kong protests were not
going on. The big problem they face is putting down the protests violently
could lead towards pronouncements of them violating the agreement for it being
held over. Which will lead toward countries people openly selling heavy
weapons to Taiwan and maybe even building bases.

~~~
thefounder
I really doubt China cares a bit about the agreement signed with the UK. They
are more concerned alienating HK people which is hard not to do unless they
put the integration with the mainland on hold for a few good years.

------
thefounder
How is Currency Manipulator different than quantitative easing which everyone
does?

~~~
onlyrealcuzzo
China sets the price of its currency directly.

QE indirectly affects the price of your currency by manipulating the price of
your bonds.

~~~
blunte
That doesn't answer the question. No reasonably advanced manipulator of any
system is content to operate only on the most visible level of influence.

So the question really is, how different is a direct manipulation from an
ongoing secondary manipulation?

~~~
onlyrealcuzzo
It's extremely different!

In a free market, no one truly knows how the market will respond to some
signal (like the purchase of bonds). Although an unrestrained manipulator (The
Fed) can get pretty close to setting the price of all bonds by buying huge
quantities of certain bonds -- The Fed doesn't know with certainty how that
will affect the price of the currency (USD). And they don't really care that
much, to be honest. They don't measure inflation with respect to a basket of
currencies. They measure inflation with respect only to the USD.

When China literally sets the price of the RMB, there's no question what will
happen to the price of the RMB. It is whatever China says it is.

There's a huge difference between manipulating the price of your currency and
your bonds. And it's because there's a huge difference between what bonds and
currenies are, and how they're used.

------
reaperducer
Good news for the people of Hong Kong, since the Hong Kong Dollar is tied to
the U.S. dollar, and not the Chinese currency.

------
nradov
Every country would prefer to devalue their currency relative to others in
order to increase their trade surplus (or cut their deficit). Mathematically
they cannot all succeed, so it ends up being a slow motion race to the bottom.

~~~
simonh
That’s really not true. Being able to buy up goods and assets abroad for cheap
can also be highly desirable. The evils of foreigners despicably trying to
sell you their goods at cut rate prices are often exaggerated.

------
OrgNet
All Governments manipulate currencies...

------
kaonashi
China has a peg to the USD - they can peg at any given multiplier, no
particular multiplier is any more valid than another, so how can they (or any
other country with a peg) _not_ be manipulating their currency?

It seems to me, the US gov't no longer cares much for the new multiplier, so
this is just a cynical way to put negotiating pressure on them.

------
faissaloo
Pretty rich coming from the US, but I digress

------
eumoria
Little outside of the topic but:

“We expect a quick—and possibly intemperate—response from the White House, and
consequently expect a more rapid escalation of trade tensions.”

Haha, really? No one would expect a intemperate response out of this cool and
collected admin.

------
iyw
US sad they can't set Fed rates like the People's Republic of China without
incurring interest. Federalize the Federal reserve and we would be capable of
doing similar.

------
Synaesthesia
Doesn’t China have the right to do whatever they want with their currency, as
a sovereign country?

~~~
mdorazio
Yes, and every other country has the right to respond to what China does as
they see fit, which is exactly what the US is doing.

------
sabujp
why don't all countries let their currencies float?

------
systematical
Wouldn't a more effective US strategy against China been to get the EU, Japan,
and South Korea in on the tarrifs as well? Might as well throw in Canada and
Mexico as well on account of being NAFTA partners. That would account for all
of Chinas major trading partners. Japan and SK might have been difficult, but
a combined North America + EU might have done the trick.

Maybe the Trump Administration tried this, but I find it unlikely since this
Administration opened up lambasting our traditional allies. This trade war as
it stands is going nowhere. China won't budge.

------
codingslave
The long story to this is that the Chinese dont like what Trump is doing, he
is the first to stand up to their tactics. The thing is, if Trump doesn't get
reelected, a democratic candidate will most likely not continue the trade war.
China has every incentive to place pressure on the us stock market in the hope
that it ruins Trumps chances at reelection. So they play this long waiting
game, in the chance that Trump doesnt get elected.

~~~
tunesmith
From that perspective, what is arguably good about this trade war continuing?

~~~
codingslave
Its a battle for who is the world economic power in 20 or 30 years. The
american public doesn't understand what is at stake here. Unfortunately the
media is calling Trump a buffoon, when the trade war, and possible subsequent
economic hit to the USA, is vital to our long term economic future.

~~~
jefflombardjr
If it is indeed a battle, like you say, infrastructure investment in wind +
solar, reliable public transportation, a public health system, and free public
education would do us 100x more than playing silly games with China.

~~~
codingslave
Clean energy will never beat oil, its a pipe dream. Oil packs too much energy
per barrel, its not even worth discussing. Reliable public transportation has
nothing to do with competing for industries on a mass scale, it helps but I
really dont see how it could cause a categorical change. Education does
nothing if you have no good jobs to employ people with, education reform is
largely a myth, hundreds of millions have been pored into education by Bill
Gates and Mark Zuckerberg, ZERO positive results have been shown. Bill Gates
has said this himself. Education is a filtering mechanism, it doesn't upgrade
people. The longer we continue with these pipe dreams the more jobs we lose.

~~~
jefflombardjr
1) Energy density matters. You cite no data to back your claims up, in fact
the opposite is true. Lithium batteries pack just as much energy per kg.
Lithium is at 41.7 kJ per gram [0], Oil is at 45 kJ per gram [1]

Battery tech has more room for improvement than the hard chemical/physical
limits of oil.

2) Job creation is a farce. We don't more oil riggers any more than we need
more lamplighters and switchboard operators. If you want to ensure everyone
has a good quality of life - a basic income looks more promising.[2]

[0]: [https://en.wikipedia.org/wiki/Lithium-
ion_battery](https://en.wikipedia.org/wiki/Lithium-ion_battery)

[1]:
[https://hypertextbook.com/facts/2003/ArthurGolnik.shtml](https://hypertextbook.com/facts/2003/ArthurGolnik.shtml)

[2]: [https://tcf.org/content/commentary/universal-basic-income-
ve...](https://tcf.org/content/commentary/universal-basic-income-versus-jobs-
guarantee-serves-workers-better/?agreed=1)

~~~
codingslave
1.) By cost per barrel and energy provided, oil is impossible to beat. If
there was something cheaper, it would have mass adoption.

2.) Job creation is a farce? So lets just give everyone money? We passed NAFTA
and destroyed the mid west, 15 years later everyone in those states realized
what happened and then voted for Trump. The whole nation was caught off guard
by something that was hiding in plan sight. Government policy directly affects
where companies put jobs. Ignoring and completely arguing against this is a
really radical position.

~~~
jefflombardjr
1.) Environmental externalities are not included in the full cost of oil and
now we have a classic tragedy of the commons problem.[0] It's not just the CO2
emitted in the burning of oil, it's also the energy loss in distribution, the
energy + environmental cost or resource extraction, etc. [1]

2.) Yes! Precisely. If you're paying people to dig a hole, then some one else
to fill it, why not skip the meaningless labor and just give people the money?
It wastes less energy/labor. Obviously we need some people to do important
jobs for society, but this is a driving principle behind a universal basic
income. It's not about entitlements or free money, it's about what's most
efficient for our country. While I'm undecided whether I'd vote for him in the
primaries, Andrew Yang is actually doing a great job of educating people on
this, I suggest you take a look at his website if this is new to you:
[https://www.yang2020.com/what-is-freedom-dividend-
faq/](https://www.yang2020.com/what-is-freedom-dividend-faq/). A really good
alternative to this would be reducing the hours in the work week.

[0]
[https://en.wikipedia.org/wiki/Tragedy_of_the_commons](https://en.wikipedia.org/wiki/Tragedy_of_the_commons)
[1]
[https://www.smartcitiesdive.com/ex/sustainablecitiescollecti...](https://www.smartcitiesdive.com/ex/sustainablecitiescollective/true-
cost-gasoline-15-gallon/26284/)

------
ptah
so what? surely it is their freedom to do with their currency as they please

------
Spooky23
It means the Trump family will make a bunch of money on the volatility, and
the US will capitulate in a few months.

~~~
rdtsc
> Trump family will make a bunch of money on the volatility,

Why not just set up a foundation and request all the governments who want arm
deals or other favors to donate it. Forcing China do devalue its currency
seems like a very complicated way of going about it.

~~~
Spooky23
They do that too.

[https://www.propublica.org/article/trump-inc-podcast-
donald-...](https://www.propublica.org/article/trump-inc-podcast-donald-trump-
jr-india-project)

------
internet_user
It ends with China being cut off from SWIFT and correspondent banking.

That would probably make them re-think their approach to economic warfare.

~~~
simonh
That would also do crippling damage to US and other foreign companies doing
business with China. Even the current tariffs and counter-tariffs have cost US
companies many billions. Qualcomm alone is estimated to have lost about a
billion dollars in sales.

~~~
internet_user
Boohoo, poor corps. Should we sell ourselves out entirely to China to satisfy
the corporate profit motive?

Personally, I rather Qualcomm goes bankrupt entirely than see Chinese global
hegemony.

~~~
wahern
Abusing our current structural position in the international monetary system
is the surest way to hasten the end of our own hegemony and the beginning of
Chinese hegemony--if that ever comes.

~~~
maps
Huh?? Isn't setting up the structure and abusing the US position what has been
happening for the past half century?

It actually seems like the recent change has been to let china get away with
whatever they want with no struggle and simply accept a nice slow bleed out.

------
datumy
Isn't Chinese Yuan depreciation caused by Trump's relentless tariff, just like
Mexican Peso's depreciation when Trump threatened tariff early this year?

I'm confused who is manipulating the market & currency.

~~~
internet_user
No. It's caused by China's central bank printing currency in response to
tariffs, essentially using currency as a weapon.

~~~
datumy
OK. tariffs => printing money, so tariff is the root cause, no?

~~~
aianus
There are plenty of good reasons why China deserves tariffs, why not start
there as the root cause?

Protectionism, IP theft, banning or heavily restricting US tech firms from
operating in (aka exporting to) China, the list goes on.

~~~
simonh
And if that was the real reason, you’d expect the US to be coordinating with
other countries that have the same beef with China. Instead, the US is
antagonising them as well.

Trump has been very clear the tariffs are mainly about boosting US
manufacturing. It’s not going to work, but that’s what he keeps saying. If it
really was about the issues you list, there are plenty of ways to address them
in a much more coordinated and effective manner with like minded allies.
Instead the US keeps their demands very vague and keeps changing the criteria,
to avoid the chance of an actual agreement.

Contrast with the renegotiation of NAFTA. Clear, specific demands in areas
they knew would be open to negotiation. In the end, fairly minor updates and a
workable deal.

~~~
busymom0
> It’s not going to work, but that’s what he keeps saying.

So far it has worked very well for the US and China has been suffering. US has
been able to create 6 million jobs with 2 million manufacturing jobs alone
created since his election. China has lost a lot of manufacturing jobs and a
lot of manufacturers are moving away from China and either coming back to US
or moving to places like India where IP theft isn't a huge problem.

US economy is also doing very well, GDP growth has beaten all expectations and
what not.

~~~
astronautjones
> So far it has worked very well for the US and China has been suffering. US
> has been able to create 6 million jobs with 2 million manufacturing jobs
> alone created since his election.

this is nonsense. in what sectors?

~~~
busymom0
Why would you call a stat nonsense?

Here's sources. Note that they are from few months ago and the number has been
growing since then:

> The Trump Scoreboard shows that 5.4 million new jobs have been created under
> the 45th president.

[https://www.marketwatch.com/story/trump-scoreboard-shows-
acc...](https://www.marketwatch.com/story/trump-scoreboard-shows-acceleration-
in-jobs-growth-even-with-unemployment-rate-at-new-lows-2019-05-03)

[https://www.forbes.com/sites/chuckdevore/2019/02/01/manufact...](https://www.forbes.com/sites/chuckdevore/2019/02/01/manufacturers-
added-6-times-more-jobs-under-trump-than-under-obamas-
last-2-years/#adb26485635a)

[https://www.forbes.com/sites/chuckdevore/2019/03/11/trumps-p...](https://www.forbes.com/sites/chuckdevore/2019/03/11/trumps-
policy-magic-wand-boosts-manufacturing-jobs-399-in-first-26-months-over-
obamas-last-26/#317ba99520a6)

[https://www.wsj.com/articles/u-s-december-nonfarm-
payrolls-g...](https://www.wsj.com/articles/u-s-december-nonfarm-payrolls-
grew-by-312-000-jobless-rate-rose-to-3-9-11546609016)

[https://www.wsj.com/articles/u-s-july-nonfarm-payrolls-
grew-...](https://www.wsj.com/articles/u-s-july-nonfarm-payrolls-grew-
by-164-000-11564749103)

[https://www.cnsnews.com/news/article/terence-p-
jeffrey/47900...](https://www.cnsnews.com/news/article/terence-p-
jeffrey/479000-under-trump-manufacturing-jobs-hit-highest-level-obama)

[https://www.investors.com/politics/commentary/trumps-
economy...](https://www.investors.com/politics/commentary/trumps-economy-
creating-manufacturing-jobs/)

------
gopher2
Now what?

Is there a legal designation or meaning to currency-manipulator I'm unaware
of, or is this basically like the Chinese designating Trump a "name-caller."

~~~
internet_user
"The three assessment criteria are: “(1) a significant bilateral trade surplus
with the United States is one that is at least $20 billion; (2) a material
current account surplus is one that is at least 3 percent of gross domestic
product (GDP); and (3) persistent, one-sided intervention occurs when net
purchases of foreign currency are conducted repeatedly and total at least 2
percent of an economy’s GDP over a 12-month period.”[1]

[https://en.wikipedia.org/wiki/Currency_manipulator](https://en.wikipedia.org/wiki/Currency_manipulator)

~~~
Bendingo
That seems pretty arbitrary to me.

~~~
internet_user
How so? It's just a way to ban competitive devaluations.

------
NTDF9
This is just nonsense. All central banks "manipulate" their currencies. The
FED did that by printing trillions in QE. The FED did that in 1973 when they
went off the gold standard. The FED did that in 1935 when they changed the
value of the dollar.

Funnily enough, the only way other major currencies can stop depreciation is
by having more dollars. The way to do that would be more exports. But trade-
warrer-in-chief just slapped 10% tariff on Chinese exports. If their exports
go down, their currency will go down.

So, in effect, Trump caused the Yuan to devalue? So Trump is the manipulator,
not China?

~~~
thephyber
> So Trump is the manipulator, not China?

"currency manipulator" is a legal designation, not just an insult. It has 3
requirements (someone linked to the Wiki in another thread).

I'm pretty sure Trump wants to weaken the USD to increase US manufacturing and
make our exports more competitive with the world, but I don't see that he has
a plan to do it. He seems to be grabbing for any kind of leverage he can get
to bully other economies into making promises to increase their imports of US
exports.

It's just giving false hope to US industries which no longer have a
competitive advantage in the world market... long enough to last through the
next presidential election.

~~~
NTDF9
> It's just giving false hope to US industries which no longer have a
> competitive advantage in the world market... long enough to last through the
> next presidential election.

I can see that. He doesn't care what really happens in the world as long as he
can win the election.

------
devoply
Yes considering the US prints hand over fists amounts of money to deal with
its economic woes, it's sort of a joke where the emperor wears no clothes, but
no one says anything because he's the emperor.

[https://www.investopedia.com/articles/investing/090915/quant...](https://www.investopedia.com/articles/investing/090915/quantitative-
easing-vs-currency-manipulation.asp)

> "In theory, currency manipulation and a monetary policy like quantitative
> easing aren't the same thing. One is interest rate policy based and the
> other currency focused. However, as central banks began their QE programs,
> one result was the weakening of its currency.

> Intentional or not, it can be argued that QE is, in some way, a form of
> currency engineering. Whether its manipulation that will always be up for
> debate."

~~~
chibg10
The USD has risen against pretty much every major currency in the past several
years. Its status as the world reserve currency keeps its value artificially
high despite running the printing press.

Whether this is good or bad for the US economy is debatable (and unclear), but
it's not really a recipe for currency manipulation at all. I have no idea what
you're talking about.

~~~
oska
> The USD has risen against pretty much every major currency in the past
> several years.

And would have risen more without QE.

~~~
AnthonyMouse
> And would have risen more without QE.

And risen even more than that if they had started _destroying_ currency. But
the usual target for a currency is value stability with other major
currencies, and "devaluation" means that its value goes _down_ compared to
most other currencies.

It's completely normal (and basically required to prevent deflation) to create
some new currency during normal (i.e. growth) times to provide more currency
to use for the increasing number of transactions.

------
devoply
Yeah you have manipulated a made up thing that we control and you are not
playing by the rules where we put sanctions on you and then you become f*ed.

