November 29, 2012 Reading Time: < 1 minute

The BBC reports:

The US has decided not to declare China as having manipulated its currency to gain an unfair trade advantage.

But the Treasury did say that China’s currency, the yuan, remains “significantly undervalued” and urged China to make further progress.

In its semi-annual report, it said Beijing did not meet the criteria to be called a currency manipulator, which could have sparked US trade sanctions.

Critics of China say it keeps the yuan low to keep its exports cheap.

There’s a point that no-one in the establishment will admit.

Every country with a central bank is by definition and without exception a currency manipulator.

Every country that devalues its currency to boost exports is a currency manipulator.

Every country that bails out banks is a currency manipulator.

Every central bank purchase of treasury securities, mortgage-backed securities or equities is currency manipulation.

Every central bank that inflates away treasury debt is a currency manipulator.

And that is why America would look clownish and absurd to label China a currency manipulator, when China can throw back the exact same accusation even more forcefully. China holds trillions and trillions of dollar-denominated assets.

By Azizonomics

AIER Staff

Founded in 1933, The American Institute for Economic Research (AIER) educates people on the value of personal freedom, free enterprise, property rights, limited government, and sound money. AIER’s ongoing scientific research demonstrates the importance of these principles in advancing peace, prosperity, and human progress.

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