{"id":452,"date":"2010-07-09T11:40:00","date_gmt":"2010-07-09T15:40:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=452"},"modified":"2018-08-18T17:41:31","modified_gmt":"2018-08-18T21:41:31","slug":"the-u-s-treasury-currency-report","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/07\/09\/the-u-s-treasury-currency-report\/","title":{"rendered":"The U.S. Treasury currency report"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Yesterday the U.S. Treasury Department releases its semi-annual currency report.\u00a0 The big news was that the language toward China was significantly softened.\u00a0 In the past China has been described as a currency manipulator.\u00a0 But last month the Chinese stated their intention to let their Yuan currency rise relative to the U.S. dollar.\u00a0 They did in fact allow that to occur.\u00a0 However, the amount of the rise was negligible, and was largely a token gesture toward the U.S.\u00a0 Clearly it was appreciated as the Obama Administration has backed off on its tough language toward the East Asian economic giant.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">My own opinion is that I am disappointed with this stance.\u00a0 I cannot figure out why the world&#8217;s second largest economy is in need of protectionist economic policies, which the fixed Yuan-Dollar peg represents.\u00a0 Yesterday&#8217;s policy softening represents a subsidizing of the average Chinese worker by the United States consumer.\u00a0 Let me explain.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">The government of China&#8217;s social contract with its citizenry is that in exchange for denying them the opportunity of multiple political parties to vote for, they offer full employment.\u00a0 That means that Chinese businesses are not run for profitability, but for full-employment.\u00a0 That means that they are much more inefficient than comparable businesses the world over.\u00a0 So how do they survive?\u00a0 They survive because of massive subsidies from the Chinese government.\u00a0 How do the Chinese afford this?\u00a0 They pay for the inefficiency because of the massive U.S. dollar reserves that they accumulate from an artificially low Yuan currency.\u00a0 That is, we in the United States buy artificially cheap Chinese goods due to the artificially cheap Yuan.\u00a0 Those excess dollars are then funneled back into inefficient Chinese enterprises.\u00a0 This is not a situation that can sustain itself long-term.\u00a0 Unfortunately, the Obama Administration is pushing the day of reckoning further into the future.\u00a0 And this is not my preference.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yesterday the U.S. Treasury Department releases its semi-annual currency report.\u00a0 The big news was that the language toward China was significantly softened.\u00a0 In the past China has been described as a currency manipulator.\u00a0 But last month the Chinese stated their intention to let their Yuan currency rise relative to the U.S. dollar.\u00a0 They did in [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-452","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=452"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/452\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}