Currency War
Sept 16, 2010
Are you ready for a currency war? Well, buckle up, because things are about to get interesting. This week Japan fired what is perhaps the opening salvo in a new round of currency wars by publicly intervening in the foreign exchange market for the first time since 2004. Japan’s bold 12 billion dollar move to push down the value of the yen made headlines all over the world. Japan’s economy is highly dependent on exports and the Japanese government was becoming increasingly alarmed by the recent surge in the value of the yen. A stronger yen makes Japanese exports more expensive for other nations and thus would harm Japanese industry. But Japan is not the only nation that is ready to go to battle over currency rates. The governments of the U.S. and China continue to exchange increasingly heated rhetoric regarding currency policy. In Europe, there is growing sentiment that the euro needs to be devalued in order to help European exports become more competitive. In addition, exporters all over the world are already loudly complaining about the possibility that the Federal Reserve is about to unleash another round of quantitative easing. Virtually all major exporting nations want the value of the U.S. dollar to remain high so that they can keep flooding us with lots of cheap goods. The sad reality is that our current system of globalized trade rewards exporting nations that have weak currencies, and many nations have now shown that they are willing to take the gloves off to make certain that their national currencies do not appreciate in value by too much.
你準備好一場貨幣戰爭嗎？嗯，綁好安全帶，因為事情是要變得有趣。這週日本開火，也許是新一輪貨幣戰爭的序幕，自2004年以來的第一次公開干預外匯市場。日本大膽的120億美元舉措，推低日元的價值成為世界各地的頭條新聞。日本的經濟是高度依賴出口，和日本政府被最近的日元大幅升值變得日益感到震驚。較強的日元使得日本出口給其它國家更昂貴，和因而會損害日本產業。但日本卻不是唯一的國家準備在滙率上爭戰，美國和中國政府就貨幣政策繼續交換日益激烈的言辭。在歐洲，有越來越多的情緒歐元需要貶值，以幫助歐洲出口變得更有競爭力。此外，世界各地的出口商已經大聲抱怨，有關可能性美聯儲即將發動另一輪的量化寬鬆政策。幾乎所有主要出口國家，想要美元價值持續高企，因此他們能夠保持以大量的廉價商品水浸我們。可悲的現實是，我們目前的全球化貿易制度獎勵有疲軟貨幣的出口國，和許多國家現在已顯示，他們願意除去手套以確保它們國家的貨幣不會升值太多。
Some nations have been involved in open currency manipulation for some time now. For example, Singapore is well known for intervening in the foreign exchange market in order to benefit exporters. Also, the Swiss National Bank experienced losses equivalent to about 15 billion dollars trying to stop the rapid rise of the Swiss franc earlier this year.
一些國家現在已參與公開的貨幣操縱一段時間，例如，新加坡干預外匯市場是眾所周知的，以圖造福出口商。此外，瑞士國家銀行經歷損失相當於大約 150億美元，試圖在今年早些時候阻止瑞士法郎迅速上升。
But as we race toward the end of 2010, currency manipulation is becoming a major issue on the world stage.
但是正當我們朝著2010年年底競賽，貨幣操縱在世界舞台上正成為一個主要的議題。
Rumors that the Federal Reserve is considering a substantial new round of quantitative easing is already causing many major exporting nations around the world to howl in outrage.
有傳聞說，美聯儲正在考慮一項重大新一輪的量化寬鬆貨幣政策，已在導致許多世界各地的主要出口國家在憤怒中嚎叫。
Why?
為什麼呢？
Well, quantitative easing by the Federal Reserve could put substantial downward pressure on the value of the dollar and that would make exports significantly more expensive in the United States. The reality is that even a relatively small change in the value of the U.S. dollar can have a major impact on exporters.
嗯，聯邦儲備局的量化寬鬆貨幣政策可把大量的下降壓力在美元的價值上，和那會使在美國的出口貨(註：即入口貨)顯著地昂貴。現實情況是，即使是相對較小的美元價值改變，能對出口商有重大的影響。
But what could really set off a massive currency war is the ongoing dispute between the U.S. and China.
但真正能掀起一場大規模貨幣戰爭的是，中美之間的持續爭端。
For years, China has kept the value of their currency artificially low. Even though China has made a few small moves toward a more free-floating currency policy, at this point China’s currency is still pretty much pegged to the U.S. dollar. It is estimated that the Chinese government is keeping China’s currency at a value about 40 percent lower than what it should be. This is essentially a de facto subsidy to China’s exporters.
This has enabled China to flood the United States with cheap goods and it is killing entire industries in the United States. Americans have loved rushing out to Wal-Mart to get super low prices on all kinds of stuff, but in the process we have slowly but surely been shipping our manufacturing base and our standard of living over to China.
In recent years both the Bush administration and the Obama administration have been whining about this currency manipulation by China, but both administrations have stopped short of taking any real action.
But are there now signs that the Obama administration is going to get serious and start a currency war?
Well, last week Barack Obama did send the head of his national council of economic advisers, Larry Summers, to Beijing to discuss currency issues.
But what can we do other than whine at this point?
Are we willing to start a trade war?
Considering the fact that China holds nearly a trillion dollars worth of U.S. Treasuries, that probably would not go so well for us.
Even though China’s currency manipulation is absolutely raping the U.S. economy, China has so much leverage over us at this point that it isn’t even funny.
For example, China has almost a complete and total monopoly on rare earth elements. If China totally cut off the supply of rare earth elements, we would have no hybrid car batteries, flat screen televisions, cell phones or iPods. Not only that, but rare earth elements are used by the U.S. military in radar systems, missile-guidance systems, satellites and aircraft electronics.
But something has to be done. Essentially we are caught between a rock and a hard place.
Today, the United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.
Last month, the monthly trade deficit with China was approximately 26 billion dollars. For the year, the trade deficit with China will be somewhere in the neighborhood of 300 billion dollars or so. The transfer of wealth to China that represents is absolutely mind blowing.
The U.S. economy is getting poorer and the Chinese economy is getting richer each and every month.
We are in decline and China is on the rise. In fact, one prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
This would not have ever happened if we had not put up with China’s open and blatant currency manipulation all this time.
But now they have us over a barrel and standing up to China would be incredibly painful for the U.S. economy in the short-term.
So will we actually see a currency war break out soon?
Well, it seems almost a certainly that countries throughout the world will continue to manipulate their currencies in order to gain a competitive advantage, but if you are waiting for the Obama administration to truly stand up to China you are probably going to be waiting for a very, very long time.
http://theeconomiccollapseblog.com/archives/currency-war
世界一貨幣 - 一步一步來
塔普利：'美國試圖摧毀歐元'
美元之死
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