Drudge Retort: The Other Side of the News
Monday, July 09, 2018

Desmond Lachman, a resident fellow at the American Enterprise Institute, writes about the global implications of China's recent sharp currency depreciation: "Not only does that movement likely presage further currency depreciation in China, the world's second-largest economy, but it also increases the likelihood that China and the United States might be drifting inexorably toward both a currency and a trade war."

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Seems like a good time for Trump to start a trade war. Alot of parallels being made with Japan in the 80's.

#1 | Posted by boaz at 2018-07-09 11:37 AM | Reply

OH crap!!!!!!!!!!!!!!!!! China is suffering from inflation. I guess they were depending on exports to the US too much.

#2 | Posted by Sniper at 2018-07-09 11:50 AM | Reply

"suffering from inflation"

did you read the article? China WANTS this and it will be looked at by the USA as China cooking its books at the expense of the USA.

#3 | Posted by klifferd at 2018-07-09 01:39 PM | Reply | Newsworthy 3

Snippy read and understand something? Surely you jest.

#4 | Posted by bored at 2018-07-09 02:34 PM | Reply | Newsworthy 1

I guess you two libs read a different article than I did or you can't read..

"This is especially the case at a time when domestic policy efforts are being made to rein in China's massive credit and housing market bubbles and as the Chinese economy gets hit by an increase in U.S. import tariffs.

As China's credit and housing market bubbles burst, the Chinese economy must be expected to weaken markedly."

#5 | Posted by Sniper at 2018-07-09 02:37 PM | Reply | Newsworthy 1

This is what Trump thinks, FTA:
Far from viewing currency depreciation as a means to support a weakening economy, the Trump administration will view such depreciation as a Chinese return to its old ways of unfairly manipulating its currency for competitive advantage and for generating trade surpluses at the United States' expense.

China's decades of easy credit has caused China to boom and its export industry to flourish, but has also caused a massive housing bubble. China needs to stop easy credit. The only way to stimulate its exports now is to deflate its currency, so they will do that.

That will be good news for consumers outside of China and the US. It will be bad news for US exporters and other producers that compete with China.

Peole are going to get poorer.

#6 | Posted by bored at 2018-07-09 04:05 PM | Reply | Newsworthy 2

#6 | Posted by bored - Makes a lot of sense. Especially when you look at how many US Dollars they hold too.

#7 | Posted by GalaxiePete at 2018-07-09 09:31 PM | Reply

Fluctuations...

#8 | Posted by AuntieSocial at 2018-07-09 11:28 PM | Reply

From an export perspective, China wants a weaker currency, to help overcome the impact of tariffs on exports to the US. The Chinese have been manipulating their currency for many years, so as to help strengthen exporters of all stripes. Of course, imports from the US, featuring higher prices and tariffs, will greatly slow.

From a local currency perspective, the currency manipulation will probably cause massive problems in the Chinese credit markets, and among those highly-levered real estate developers and municipalities which have been borrowing like Trump acolytes. As their cost of money (interest rates) goes up, some borrowers will not be able to roll over 100% of their current debt load, but also will not be able to repay the shortages. Lenders will be forced to renegotiate loans so as to not cause a wave of defaults--but some will occur anyway.

The lessons for folks in the US:
-we will be importing more Chinese stuff, starting about...now
-exports to China will soon be shipped over in canoes, given the softening demand
-any US investor exposed to the Chinese credit markets (or those who lend there) are in for a pounding

#9 | Posted by catdog at 2018-07-10 08:25 AM | Reply | Newsworthy 1

Too many people forget that exporters here or in China are not nations, they are corporations. This trade war was caused by American corporations who decided to import cheap Chinese goods rather than hire Americans. WE can only hope that this trade war harms them significantly, costs them billions and billions. If we are going to have a trade war then let's have a TRADE WAR but let the focus be on the enemy which is not China. It is the American corporations who have taken their manufacturing to China. Those are the entities we need to hurt as badly as we can.

#10 | Posted by danni at 2018-07-10 08:46 AM | Reply | Funny: 2

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Yes, of course, let's all worry about China's currency depreciating, but let's ignore THE EXACT SAME THING happening to our own currency.

#11 | Posted by kudzu at 2018-07-10 09:48 AM | Reply

This is so freaking awesome. Many Reps, including Trump, in this decade decried China purposefully keeping the value of the currency low. I even remember Trump stating this type of tactic causes trade wars. But since Obama was in office while they were doing it, Dems responded by saying Reps were using scare tactics. Now, the truth is being revealed by even moderate outlets on both sides but now the Dems are tying it to the tactics Trump is using to prevent China from being able to manipulate their currency at their whim. Please, just pick a side and stick to it. It's either good or bad. Don't flip flop because the party you like is or is not in power.

#12 | Posted by humtake at 2018-07-10 11:40 AM | Reply | Newsworthy 3

#10

Danni,

Companies shouldnt be prosecuted just for doing fair business. It's not a companie's job to be over paying employees. Companies cant afford to be swayed by sob stories. If American's cost too much to employ, then maybe the American needs to lower the cost of his labor/skill or the market will do it for him. That's what happened in this case.

I know you are going to come back with "Oh you dont care about the American worker" or some other BS like that. Actually, I do care about the American worker, I just want the worker to be honest about what his labor is worth and not overcharge himself out of the market. Some skills are employable, some just marginally so. This is where we need to start from, not start from just assuming all Americans are worth $50 an hour in total benefits. Would it be nice? Sure, possible? No..

#13 | Posted by boaz at 2018-07-10 12:37 PM | Reply

It's funny to see the cons act like this is some new revelation. Kudzu has the right comment here. See #11.

#14 | Posted by BruceBanner at 2018-07-10 12:37 PM | Reply

OH crap!!!!!!!!!!!!!!!!! China is suffering from inflation. I guess they were depending on exports to the US too much.
#2 | POSTED BY SNIPER

I guess you two libs read a different article than I did or you can't read..
"This is especially the case at a time when domestic policy efforts are being made to rein in China's massive credit and housing market bubbles and as the Chinese economy gets hit by an increase in U.S. import tariffs.
As China's credit and housing market bubbles burst, the Chinese economy must be expected to weaken markedly."
#5 | POSTED BY SNIPER

Seriously you literally contradict yourself when doubling down on stupidity.

The big issues in China? "credit and housing market bubbles". The tariffs are only a small part. It's in your own damn post.

There is literally no mention that US tariffs are having a significant impact on the Chinese economy. You wish it so doesn't make it so.

And the article is about currency depreciation which they are doing purposefully to bolster the economy and be more competitive against us companies. This is going to hurt us, dummy.

Go back to writing your romantic novels about Trump and Putin.

#15 | Posted by Sycophant at 2018-07-10 02:19 PM | Reply

Note "credit and housing bubble". WTF does that mean to you?

Answer................. drum roll please.

Too much debt and housing is expensive. Is that good for them?

Go back to your sand box and play with your little toy.

#16 | Posted by Sniper at 2018-07-10 03:55 PM | Reply

Note "credit and housing bubble". WTF does that mean to you?
Answer................. drum roll please.
Too much debt and housing is expensive. Is that good for them?
Go back to your sand box and play with your little toy.

#16 | POSTED BY SNIPER

Wow. Triple down on the lies and still get it wrong. Damn, that's talent!!!

That doesn't mean they are suffering from inflation. Your #2 post.
That doesn't mean US Tariffs are doing substantial damage. Your #5 post.

And neither the debt or housing bubble has anything to do with the depreciation or US Tariffs.

So I have to ask, what the hell are you babbling about? Get back on your meds.

#17 | Posted by Sycophant at 2018-07-10 06:19 PM | Reply

The US population is about 5% of the total population of the planet. China exported a bit more than $500 billion in goods and services to the United States last year. This comes to a bit more than 4% of its GDP, measured on a dollar exchange rate basis. Trump has no leverage and much to lose.

#18 | Posted by bayviking at 2018-07-10 09:56 PM | Reply

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