I admit I need help

[Guest]

in understanding all of this and hope that someone like VK or someone who knows this stuff can explain it in words I understand.

First.....this little thing is from July 2011..

"China is disrespecting America.The Asian giant is an international trade outlaw, and U.S. manufacturers and workers are its crime victims. China is disrespecting America.

The Asian giant is an international trade outlaw, and U.S. manufacturers and workers are its crime victims.

China illegally subsidizes its export industries and unlawfully manipulates its currency. That kills U.S. industry and destroys U.S. jobs. Earlier this year, the Obama administration asked China nicely to allow its currency value to float up naturally on international markets. On June 19, China said it would."

China’s Currency Manipulation: Flipping off America | Economy In Crisis (http://economyincrisis.org/content/chinas-currency-manipulation-flipping-america)

I think we all know that as part of Romney's first day in office he would label China a currency manipulator on his first day in office.

This from TODAYS news...

"The U.S. government said Friday that China has made progress in allowing its currency to rise against the dollar and declined to accuse the nation of manipulating its currency to gain a trade advantage.

The decision issued by the Treasury Department Friday should help avert a potential trade dispute. But the department said China’s currency is still undervalued and must rise further against the dollar.

The yuan has gained 8 percent against the dollar in the past two years. A lower-valued currency gives China a trade advantage by making its exports cheaper and U.S. imports more expensive.

If the department found that China was manipulating its currency, the Obama administration would have had to initiate negotiations with China. If those talks failed, the U.S. could impose trade sanctions.

Some U.S. manufacturers have urged the administration to take punitive steps to force China to allow the yuan to trade freely. The yuan currently trades within a narrow range against the dollar."

US declines to cite China as currency manipulator - Business - Boston.com (http://www.boston.com/business/markets/2012/05/25/declines-cite-china-currency-manipulator/U2UXYC5Py6bnj4aAJRXZwI/story.html)

"The U.S. trade deficit with China widened in March, the Commerce Department said earlier this month. The deficit with China this year is on pace to exceed last year’s gap of $295.5 billion, which was an all-time high for any country.end of story marker"

Obviously the two candidates differ on what seems to me to be very important and while I am going to continue to explore on this, it is important it seems and will be an issue....seems we should try to understand it as it refers directly to our economy !

[Guest]

"The Obama administration says China’s policies keep the yuan undervalued and produce an unfair advantage in global trade. Politicians including presumptive Republican presidential nominee Romney and Senator Charles Schumer, a New York Democrat, have complained that the administration should be more aggressive in pushing China on the currency. No country has been designated a manipulator by the U.S. since China in 1994."

Obama Shunning China Yuan Manipulator Tag Gets Romney Ire - Bloomberg (http://www.bloomberg.com/news/2012-05-25/u-s-treasury-declines-to-name-china-currency-manipulator.html)

[Guest]

On a news show a while back, I heard that was the problem with what happened to SOlyndra. The US government gives them hundreds of millions in a loan and China responded with a thirty billion dollar *GRANT* to *it's* solar manufacturers - and that's what drove prices down so far that Solyndra couldn't compete.

[Guest]

Is China "manipulating" it's currency? Sure. But so does the U.S. What do you think happens when the Treasury does things like "quantitative easing"? That's a synonym for printing money. When the Treasury increases the money supply prices inflate and the value of he dollar decreases. As far as China is concerned, their loans to us are being repaid with dollars worth less than the dollars they loaned us. That 's enough to aggravate any lender.

At the same time, China manages its currency in order to keep it's economy and employment on a steady growth trend. By the way, based on the economic results of the last couple of quarters whatever they're doing hasn't worked. Their economic growth has slowed to a snail's pace. That's the same reason our Fed does quantitative easing, but it hasn't worked too well because our economy is far bigger and was in far worse trouble as the result of the housing crisis than China's was.

But basically, no one with any knowledge of how economics and foreign trade works will pay much attention to what Romney says he'll do, because there's little he can do. China is by far our biggest trading partner. I'm pretty sure they buy more from us than we buy from them. So what "trade sanctions" will Romney impose that wouldn't be met immediately by the Chinese against us? Sure, Romney could put a 25% duty on most of the stuff sold at WalMart and every iPad or Apple computer imported from China--those would be a politically popular moves, wouldn't they? Then the Chinese would put a comparable duty on all the stuff they import from us, causing widespread damage and increased unemployment in our economy...a move that would also be very politically unpopular.

So stuff like Romney said, or Donald Trump before him, is designed to attract and incite voters who don't know any better. Just like lots of the other stuff said on the campaign stump. At the end of the day, there's only one good way to sustain acceptable economic growth--spend less on government than we're taking in taxes. Until we do that, all this other stuff the politicians talk about are band-aids, campaign rhetoric. That includes everything from government regulation, tax policy, the inefficiency of government spending--all that stuff. It's not that thse things aren't important, they are. It's just that they're not the root problem, the problem the politicians won't talk about.

In the end, our budget will have to be balanced by dramatically cutting entitlements, reducing defense spending and raising tax revenues. Until the politicians start talking about those things, all the conversation about stuff like trade sanctions is little more than conversation designed to incite voters to elect one candidate or the other. They're not ideas that can be taken seriously.

[Guest]

Is China "manipulating" it's currency? Sure. But so does the U.S. What do you think happens when the Treasury does things like "quantitative easing"? That's a synonym for printing money. When the Treasury increases the money supply prices inflate and the value of he dollar decreases. As far as China is concerned, their loans to us are being repaid with dollars worth less than the dollars they loaned us. That 's enough to aggravate any lender.

At the same time, China manages its currency in order to keep it's economy and employment on a steady growth trend. By the way, based on the economic results of the last couple of quarters whatever they're doing hasn't worked. Their economic growth has slowed to a snail's pace. That's the same reason our Fed does quantitative easing, but it hasn't worked too well because our economy is far bigger and was in far worse trouble as the result of the housing crisis than China's was.

But basically, no one with any knowledge of how economics and foreign trade works will pay much attention to what Romney says he'll do, because there's little he can do. China is by far our biggest trading partner. I'm pretty sure they buy more from us than we buy from them. So what "trade sanctions" will Romney impose that wouldn't be met immediately by the Chinese against us? Sure, Romney could put a 25% duty on most of the stuff sold at WalMart and every iPad or Apple computer imported from China--those would be a politically popular moves, wouldn't they? Then the Chinese would put a comparable duty on all the stuff they import from us, causing widespread damage and increased unemployment in our economy...a move that would also be very politically unpopular.

So stuff like Romney said, or Donald Trump before him, is designed to attract and incite voters who don't know any better. Just like lots of the other stuff said on the campaign stump. At the end of the day, there's only one good way to sustain acceptable economic growth--spend less on government than we're taking in taxes. Until we do that, all this other stuff the politicians talk about are band-aids, campaign rhetoric. That includes everything from government regulation, tax policy, the inefficiency of government spending--all that stuff. It's not that thse things aren't important, they are. It's just that they're not the root problem, the problem the politicians won't talk about.

In the end, our budget will have to be balanced by dramatically cutting entitlements, reducing defense spending and raising tax revenues. Until the politicians start talking about those things, all the conversation about stuff like trade sanctions is little more than conversation designed to incite voters to elect one candidate or the other. They're not ideas that can be taken seriously.

Thanks VK....

Did not mean this so much as a political item, although I realize that this, and most other things are, but noticed that we did in fact make this declaration in the 90's and just curious how it is determined.