Yeah, sure, Obummer. It's easy to mouth the words, but what are you going to do about it?
An undervalued yuan means that prices here remain low. A change in the situation would mean an overnight, across-the-board spike in prices. And it would precipitate a massive recession in China (one that is overdue anyway, imo.) Most importantly, it would probably mean retaliation by the Chinese against our continued selling of DEBT. They'd stop buying it, and they might begin selling U.S. debt on their own.
I don't think Obummer has the guts to start THAT sort of a brawl. Not until he's given up on another term in office, anyway.
A personal observation: Obummer's "I get it" catch-phrase is really starting to get on my nerves. Have any of you noticed how often he's taken to using it?
‘Enough’s Enough’ on Undervalued Yuan: Obama
By Julianna Goldman and Margaret Talev - Nov 14, 2011 2:55 AM ET
President Barack Obama kept up his pressure on China's foreign-exhange policy and trade practices, saying “enough’s enough” on what the U.S. views as a too-slow appreciation of the yuan.
While there's been a “slight improvement,” China’s exporters “like the system the way it is” and are resistant to any moves to loosen the reins on the yuan, Obama said.
“Changes are difficult for them politically, I get it,” Obama said at a news conference concluding a summit with Asia- Pacific leaders in Hawaii yesterday. “But the United States and other countries, I think understandably, feel that enough’s enough.”
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China’s Response
China has pushed back against the pressure. After Obama told Hu that the U.S. public and businesses were losing patience with China’s policies, the Chinese Foreign Ministry released a statement saying the U.S. trade deficit and unemployment are not caused by the yuan exchange rate and a large appreciation in the currency won’t solve U.S. problems.
“China’s foreign exchange policy is a responsible one,” Hu told Obama, according to the statement. The country will “continue reforming its exchange rate mechanism.”
The yuan has gained about 8 percent against the dollar in nominal terms since the country ended a two-year peg to the U.S. currency in June 2010, and 30 percent since July 2005. In real, or inflation-adjusted, terms the gain has been more than 10 percent, because consumer prices have risen faster in China than in the U.S.”
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Iran Sanctions
During the news conference, Obama also said the U.S. is examining stronger sanctions on Iran over its nuclear program. He said U.S. Russia and China “agree on the objective” that Iran must not be allowed to develop a nuclear weapon. He declined to say whether Hu and Russian President Dmitry Medvedev indicated they would support a new round of penalties.
Russia and China have resisted efforts to impose tighter sanctions on Iran at the United Nations.
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“Prudent cuts need to be matched with prudent revenue,” Obama said. “There are no magic beans that you can toss in the ground and suddenly a bunch of money grows on trees.”
Don't tell Bernanke that, Obummer! He'll just grin and point at the printing press.
Full story: http://www.bloomberg.com/news/2011-11-14/obama-says-enough-s-enough-on-china-s-undervalued-yuan-as-hu-pushes-back.html
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