A man stands outside a big bank and looks at the outline of a free trade deal with China. Man: What about Asian currency manipulation? Banker: Yes, look that way.
Some countries manipulate their currency to improve their economic position, benefiting their whole population. In other cases, currency manipulation takes place to benefit a handful.
If the currency is floating – the exchange rate is influenced by market forces – then other central banks can react. Let’s say the European Central Bank wants to lower the euro to the dollar. They can dump euros on the world currency markets. The Fed can react by dumping dollars.
With China, the currency is fixed – the exchange rate is set by the central bank. The Chinese central bank only needs to change the official exchange rate to manipulate their currency. There is nothing anyone else in the world can do.
Just because there isn’t a law against something does not make it ethical or moral. In the financial world it seems just about anything goes. In our market crash the banks and wall street were packaging bad debt and selling it to anybody who would buy it. In England the Libor rates were being manipulated to suck more money out of borrowers, high speed traders were/are buying ahead of investors to make money when the investors were trying to purchase securities. Wall Street, big businesses and banks all complain about too much regulation while they engage in unethical practices that when discovered cause more regulation to be created to keep consumers from being cheated. Countries manipulate currencies for their own advantage, it is how they do it that matters.
That sounds so un-American. Jail is for minor nonviolent drug convictions without exception*, not high level theft and corruption.*Except for drug addicted radio talk show hosts who advocate jail time for drug convictions for anyone other than themselves.
Someone said that EVERY country manipulates its own currency. Typical American who has never been outside the US, probably never outside the county where he was born and raised..Panama has NEVER manipulated its own currency..The Eurozone countries have never manipulated their own currency since the Euro went into full circulation..(OK, every OTHER country manipulates its own currency, but that’s not EVERY country.)
Darsan54 Premium Member almost 9 years ago
Yep, that’s sounds about right.
braindead Premium Member almost 9 years ago
Currency manipulation is a crime? Does that mean that if someone pleads guilty to having committed it, they go to jail?
piobaire almost 9 years ago
Some countries manipulate their currency to improve their economic position, benefiting their whole population. In other cases, currency manipulation takes place to benefit a handful.
twhalen almost 9 years ago
If the currency is floating – the exchange rate is influenced by market forces – then other central banks can react. Let’s say the European Central Bank wants to lower the euro to the dollar. They can dump euros on the world currency markets. The Fed can react by dumping dollars.
With China, the currency is fixed – the exchange rate is set by the central bank. The Chinese central bank only needs to change the official exchange rate to manipulate their currency. There is nothing anyone else in the world can do.
Theodore E. Lind Premium Member almost 9 years ago
Just because there isn’t a law against something does not make it ethical or moral. In the financial world it seems just about anything goes. In our market crash the banks and wall street were packaging bad debt and selling it to anybody who would buy it. In England the Libor rates were being manipulated to suck more money out of borrowers, high speed traders were/are buying ahead of investors to make money when the investors were trying to purchase securities. Wall Street, big businesses and banks all complain about too much regulation while they engage in unethical practices that when discovered cause more regulation to be created to keep consumers from being cheated. Countries manipulate currencies for their own advantage, it is how they do it that matters.
Jason Allen almost 9 years ago
That sounds so un-American. Jail is for minor nonviolent drug convictions without exception*, not high level theft and corruption.*Except for drug addicted radio talk show hosts who advocate jail time for drug convictions for anyone other than themselves.
Motivemagus almost 9 years ago
Great point.
Mickey and Delia almost 9 years ago
Someone said that EVERY country manipulates its own currency. Typical American who has never been outside the US, probably never outside the county where he was born and raised..Panama has NEVER manipulated its own currency..The Eurozone countries have never manipulated their own currency since the Euro went into full circulation..(OK, every OTHER country manipulates its own currency, but that’s not EVERY country.)