Trump: U.S. Dollar is “Too Strong”?

In an interview with the Wall Street Journal, Trump said this:

Mr. Trump said the U.S. dollar was already “too strong” in part because China holds down its currency, the yuan. “Our companies can’t compete with them now because our currency is too strong. And it’s killing us.”

The yuan is “dropping like a rock,” Mr. Trump said, dismissing recent Chinese actions to support it as done simply “because they don’t want us to get angry.”

Ah. So the U.S. dollar is “too strong”, especially against the Chinese yuan. This means that you get fabulous bang for your buck in China. And this is a problem. I see.

The U.S. dollar is worth more relative to the yuan, meaning that my money gets better bang for the buck on Chinese exports, meaning that I can buy more goods from China. I can buy an entire household’s worth of relatively high quality goods for as little as $1000 spent at Walmart. And this a problem? It is not a problem. It’s a blessing. It’s called “taking advantage”. It’s part of the reason why immigrants across the world – including the Chinese – are desperate to get into the United States and get jobs paid in U.S. dollars.

I have written about this before. The current arrangement with the Chinese government is a win-win almost across the board; except, that is, for Chinese citizens. The People’s Bank of China purposefully keeps their currency low against the dollar to encourage exports to the United States. China buys U.S. Treasury debt to purposefully make our money more valuable relative to their own. This is a blessing for us, not a curse. But it is a curse for Chinese citizens, who have their money purposefully devalued by their own government.

It is a blessing, in a sense, for unskilled and uneducated Chinese workers who need jobs. But the kind of jobs encouraged by this arrangement are in dirty, crowded factories and pay roughly 13 dollars per day. This is a scant blessing. And with the way robotics are developing, not even these jobs are safe. Meanwhile, the Chinese government is actively working against them. The People’s Bank of China is actively trying to reduce the value of their savings – if they have any.

Chinese citizens would be happy to consume the output of their own factories. But they can’t afford to because the output is priced for the American market. Our American lifestyle – in which we can purchase decent to high-quality goods for bargain basement prices in stores like Target and Walmart, or on Amazon – is directly subsidized by the People’s Bank of China.

Some Republicans, such as Paul Ryan and the Trumpster, have claimed that the Chinese government is waging a “currency war”. I agree with that statement. But what is poorly understood is that we are winning that war, and the Chinese government fights on our behalf. The losers are Chinese consumers, who cannot afford the output of factories on their own soil.

If a politician claims that the U.S. dollar is “too strong” , then understand this: they want to decrease it’s value relative to other currencies, which takes away your purchasing power. Perhaps you agree with that arrangement, for whatever reason. Fine. But let’s at least be honest about the implications.

Besides, the days of China as it currently stands are numbered. The Communist Party of China has irrevocably destroyed any semblance of an honest and functionally independent economy within the country. Everything is rigged and all of the books are cooked.

Economic reality ultimately cannot be overcome and God will not be mocked. A system built on institutionalized immorality – in this case, theft and deception – will eventually fall prey to it’s own vices. When the Communist Party of China loses control of the economic situation, it is going to upend the country in ways not seen since Cultural Revolution. Whether that will be mostly peaceful or horrendously bloody remains to be seen.

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