Quote:
Originally Posted by dippin
The point is that the International Monetary Fund and the World Bank have no role in determining the Chinese exchange rate.
As far as the dollar being overvalued, I say that basically because the US has accumulated trade account deficits for a very long time. I.e., for the deficits to disappear the dollar would have to be worth much less.
And a currency being overvalued is not good. The idea that the dollar being worth more=good is false. It means that while a dollar buys more, US goods also cost more for the rest of the world, reducing exports and increasing imports.
And no, the debt will not have to be monetized. In fact, the Federal Reserve chairman is elected to terms that are independent of the president precisely to give it independence from those matters.
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Well, I don't necessarily agree that IMF/WB loans to other countries who then loan/borrow with China...that there is no correlation or influence on the "market value" of Chinese currency in that regard. Certainly, China is a powerful force in the UN and policies in the IMF/WB will favor them (as they do the U.S. in many cases.) Again, my original point is that when comparing the dollar to the renminbi - China's currency looks more like a peso than a country that is launching satellites. It's value is not reflective of it's current wealth as a country. However, that fact seems to favor the US at this time so I backed off saying that was a bad thing.
Dippin, I love you like a brother, man - you don't HONESTLY believe that the Fed chairman is not influenced by the executive branch, do you?