News Journal: Number 27, October 16, 2010: Cracking Communist Chinese Currency–Float The Yuan/RBN or Devalue Your Currency Via U.S. Dollar 10% Per Year For Next Five Years Or Face U.S. Import Ban–No Pressure–Your Choice–Videos

Posted on October 16, 2010. Filed under: Globalization, International Trade, Issues, News, Politics, Print Media, Speech | Tags: , , , , , , , , , , , , , |

“The valuation of the monetary unit depends not upon the wealth of the country, but upon the ratio between the quantity of money and the demand for it, so that even the richest country may have a bad currency and the poorest country a good one.”

~Ludwig von Mises, The Theory of Money and Credit, page 278.

“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”

~Friedrich A. Hayek, The Use of Knowledge in Society

September, 1945, American Economic Review. XXXV, No. 4. pp. 519-30. American Economic Association

http://www.econlib.org/library/Essays/hykKnw1.html

Capitalism in China: Should We Trade With Them? – Ayn Rand Center for Individual Rights

Dr. Milton Friedman speaking about Free Trade

The looming China-U.S. showdown

Battling over the Yuan – F24 101001

China’s Wen Jiabao: ‘Dont pressure us to raise RMB rates’

Lee Says China Will Appreciate Yuan to Prevent Trade War: Video

Eurozone troika urges ‘broad-based’ currency appreciation in China

Inside Look: China Currency Controversy

China Currency and Trade Wars

Peter Schiff – June 21 2010 – Appreciation Of The Chinese Currency Means The Implosion Of The Dollar

Mar 24 10 Hearing on China’s Exchange Rate Policy, Niall Ferguson Opening Statement

Mar 24 10 Hearing on China’s Exchange Rate Policy, C. Fred Bergsten Opening Statement

Mar 24 10 Hearing on China’s Exchange Rate Policy, Clyde Prestowitz Opening Statement

Mar 24 10 Hearing on China’s Exchange Rate Policy, Philip Levy Opening Statement

The U.S. and China (Ted Galen Carpenter)

Government intervention into markets always requires even more government intervention to correct past mistakes.

The central bank of the People’s Republic of China (PRC) would be well advised to just let their currency freely float against the currencies of the world.

This would mean the PRC’s official currency the renminbi or RMB and its unit of currency the yuan would rise in value against both the U.S. dollar and the Euro.

Yes, this would mean the PRC’s export goods would be more expensive for both Americans and Europeans and conversely American and European goods and services would be cheaper to purchase for the PRC.

The result would be a decline in the growth of exports to the United States and Europe.

The Chinese people need to be able to increase their level of consumption and reduce their savings rate to absorb the production that currently goes almost entirely abroad as exports.

Should the PRC implement such a strategy, it would be advised to stop purchasing United States Treasury debt and as the U.S Treasury obligations mature use the dollar payments to purchase natural resource assets in the United States.

In other words diversify your portfolio out foreign government obligations into natural resources that your economy needs to manufacture goods.

As a second best solution, gradually appreciate the renminbi against the U.S. dollar at 10% per year for five years and then freely float the yuan.

Since the U.S unemployment rate is expected to exceed 8% for at least the next three years, the appreciation of the renminbi at 10% a year for five years would lead to a decline in U.S. unemployment due to increase in U.S. exports and and a rise in the demand for Chinese exports as the U.S economy recovers from the recession.

Absence an improvement in the U.S. employment situation, demand for Chinese exports would be flat or even decline.

Therefore, it is in the interest of both countries governments to have an appreciation of the renminbi.

The U.S. Federal Reserve should also abandon its practice of intervening in the U.S money market by attempting to set target Federal fund rates to expand the money supply and in turn credit.

Will any of the above actually happen?

Not likely.

The ruling classes of United States and the People’s Republic of China actually believe they are have the intelligence and knowledge exceeding that of free markets.

Both ruling classes are only fooling themselves.

Both are wrong.

Let the currency wars begin.

Let the ruling class of both parties demonstrate they care less for the welfare of their people.

Let the American and Chinese people determine the fates of their ruling class.

Increasing unemployment in both countries will lead to a revolution and the overthrow of both ruling classes.

The free market will over time prevail and the ruling class control freaks with their failed government interventionist economic policies will be replaced.

Power of the Market – How to Cure Inflation 1

Power of the Market – How to Cure Inflation 2

Power of the Market – How to Cure Inflation 3

“We shall not grow wiser before we learn that much that we have done was very foolish. “

~Friedrich A. Hayek

“Perpetual vigilance on the part of the citizens can achieve what a thousand laws and dozens of alphabetical bureaus with hordes of employees never have and never will achieve: the preservation of a sound currency.”

~Ludwig von Mises, The Theory of Money and Credit, page 495

Background Articles and Videos

China’s Economy in the Post-Crisis World

Obama Pressed On New Global Currency At Presidential News Conference

Related Posts On Pronk Palisades

Chinese Communist State Company–China National Offshore Oil Corp.(CNOOC)–Invests In Texas Oil–Videos

Printing More Money (Quantitative Easing) and The Coming Currency War and Decline In The Purchasing Power of The U.S. Dollar–Robbing The American People–Videos

The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,000,000!–Run-Away Inflation Coming Soon!

 

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