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China manipulates currency by buying U.S. debt. Does that mean Schumer wants China to stop buying U.S. debt?

Senators back bill to pressure China on currency
By MARTIN CRUTSINGER (AP) – 38 minutes ago

WASHINGTON — A group of 14 U.S. senators unveiled legislation Tuesday that seeks to increase pressure on China to let its currency to rise in value against the dollar, saying Chinese "currency manipulation" is hurting the U.S. economy.

The bill calls for stiff trade sanctions if China does not act.

Treasury Secretary Timothy Geithner says the legislation is a sign of how strongly China's trading partners feel about the issue. In an interview on Fox Business Network, Geithner said that he believes Chinese officials "ultimately will decide it is in their interests to move."

Geithner declined to respond directly to a question of whether the Obama administration would support the bill backed by Sens. Charles Schumer, D-N.Y., Lindsey Graham, R-S.C., Debbie Stabenow, D-Mich., and 11 other senators.

"We are sending a message to the Chinese government," Schumer said in a statement. "If you refuse to play by the same rules as everyone else, we will force you to."

He said the issue is of critical importance at a time of high unemployment in the United States.

"There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China's currency manipulation," Schumer said.

American manufacturers contend that China's currency is undervalued by as much as 40 percent and is a big reason for the huge U.S. trade deficit with China, which totaled $226.8 billion, last year, the largest imbalance with any country.

A stronger yuan versus the dollar would make American products less expensive in China, while making Chinese goods more expensive for American consumers.

The Obama administration is hoping China will resume allowing its currency to rise in value against the dollar as a way of narrowing that gap. China allowed its currency to appreciate until mid-2008 when the global recession began to cut sharply into its exports.

The Senate bill marks the latest escalation in tensions between the two nations.

Chinese Premier Wen Jiabao on Sunday rejected American pressure on China to allow its currency to rise in value against the dollar, saying such efforts amounted to a kind of trade protectionism. His comments came after President Barack Obama in a trade speech last week said that China would make an "essential contribution" to rebalancing the global economy by moving to a more market-oriented currency regime.

On Monday, a group of 130 House members sent a letter to the administration urging the Treasury Department to cite China as a currency manipulator in a report that is scheduled to be released next month. The group also called on the Commerce Department to impose trade sanctions on China on the basis that its currency system is an unfair trade practice.

Asked about the upcoming currency report, which the administration is required to send Congress in mid-April, Geithner said it had not yet been decided whether to cite China as a currency manipulator.

Such a finding would trigger talks between the two nations with a threat of trade sanctions if the talks failed to resolve the issue. The Obama administration, following the lead of the Bush administration, has so far refused to cite China as a currency manipulator, believing that the more productive course would be to convince the Chinese that it is in their own interests to allow their currency to rise in value.

Geithner said he believes that China needs to realize its currency policy is "not just an issue between China and the United States, it's an issue for the world economy as a whole."

The issue is a complex one for the United States because China is the largest foreign holder of U.S. Treasury bonds. The United States must depend on foreign investors to keep purchasing those bonds at a time when it is running record federal budget deficits, including a $1.4 trillion imbalance last year.

Copyright © 2010 The Associated Press. All rights reserved.

Another article here.....


Bill introduced in US Senate to punish China on currency
Foreign 2010-03-17 10:09
WASHINGTON, March 17 (AFP) - Facing election-year pressure over unemployment, US senators introduced legislation Tuesday that would impose tough new penalties on China if it failed to revalue its currency.

The legislation, which enjoys support from both sides of the political aisle, would punish currency manipulation as an unfair subsidy and could trigger a set of retaliatory US action.

The move came as lawmakers in Washington stepped up criticism of China ahead of November mid-term US elections, accusing Beijing of securing an unfair edge in trade by keeping the yuan artificially low.

It also follows Chinese Premier Wen Jiabao strong statement at the weekend that Beijing would resist any foreign pressure for a stronger yuan.

"When Premier Wen said that China's currency is not overvalued two days ago, that was the last straw and here we are to tell them we are going to force you to do it -- plain and simple," said Democratic Senator Chuck Schumer as he unveiled the legislation at a news conference.

"There is no bigger step that we can take to promote job creation here in the US than to confront Chinese currency manipulation," said the senator as he referred to the double digit unemployment crisis dogging the United States.

Republican Senator Sam Brownback said he expected a "huge vote," both in the House of Representatives and the Senate, on such legislation.

This will enable President Barack Obama's administration "to do what it needs to do," he said.

On Monday, a group of 130 Democratic and Republican lawmakers called on US Treasury Secretary Timothy Geithner to brand China a currency manipulator in a report due next month, saying Beijing was in effect subsidising exports.

"The impact of China's currency manipulation on the US economy cannot be overstated," the lawmakers said in the letter submitted to Geithner and US Commerce Secretary Gary Locke.

Geithner said Tuesday the Chinese currency was "a very important issue" not only for the United States and China but for all trading partners of the Asian giant, adding that the ball was in Beijing's court.

"I think they'll decide, ultimately, it's in their interests to move," he said in an interview with Fox Business Television.

President Obama last week renewed his call to China to embrace a "market oriented" exchange rate, upping US pressure on the yuan currency at a time of turmoil in Washington's delicate relations with Beijing.

In a separate move, the US House of Representatives on Tuesday urged China to end its "persecution" of the Falungong and rejected Beijing's charges that the banned spiritual movement is an "evil cult."

In a nearly unanimous vote, the House called on China to free thousands of practitioners who are said to be imprisoned and to abolish an office tasked with fighting the Falungong.

Wen blamed the United States on Sunday for recent tensions in Sino-US ties, indicating no let-up in their diplomatic row.

Wen accused Washington of violating China's sovereignty when it approved the sale of billions of dollars in weapons to Taiwan in January, and again when US President Barack Obama met the Dalai Lama at the White House last month.

Relations between the two countries have deteriorated over a series of other issues -- Google's threat to leave China over cyberattacks and web censorship, a string of trade disputes, and the value of the Chinese yuan.

The currency legislation introduced Tuesday would, among other things, require the US Treasury Department to identify countries with "fundamentally misaligned currencies" and a second "priority action" list of such countries that pursue such imbalances as policy.

Countries on the "priority" list would face a range of US responses, including a possible change in whether such nations get "market economy" designation for the purposes of US anti-dumping laws.

US policy would be required to reflect currency undervaluation in dumping calculations for products made in the designated country, and forbid the US government from buying goods or services from such a country unless it is a member of the WTO Government Procurement Agreement.

The measure would target projects in a designated country, including forbidding overseas private financing or insurance and opposing new multilateral bank financing, if the country fails to adopt "appropriate policies," according to a summary of the legislation. (By Olivier Knox/ AFP)

Just in case you don't think this is big, look at the quote from Geithner, at the end.... Financial World War lll Anyone??? Remember this is in addition to my last post here, in regards to the Senate proposal to China... Unreal!!!





WASHINGTON, March 16 (UPI) -- U.S. Treasury Secretary Tim Geithner said Tuesday job creation is "the most important thing we can do" for the economy and called financial reform "a just war."

In my opinion this just shows what a bunch of idiots we have in Congress. The US needs to borrow more money now than ever before and they are planning on angering one of our biggest trading partners. On top of it all, they want our currency devalued as much as 40 percent against another nation's currency. Imagine if tomorrow they got their wish and everything at the local stores cost 40 percent higher. Congress would be happy. The average Joe who is already strapped for cash has to pay more for everything.

I believe it's a lost cause for the idiots in Congress to comprehend too much anymore. I hope most of them get voted out of office and replaced with people with a little bit of intelligence. I want the US currency to be worth more not less. I want the price of gas and other items I need to purchase at the stores to go down, not up. Apparently if you are a rich congressmen, you seem to suddenly think US taxpayers aren't paying enough already. No one needs to wonder why the US economy isn't really improving that much. Our current government is the problem.

China will do whatever it wants. We have all seen teenagers complain about their parents, yet those same teenagers will fall right into line when they need to hold their hand out to get money from their parents to buy things.

Well, the United States is a broke teenager and China is our daddy with the cash.

Gee, you mean our government doesn`t understand that by printing more and more fiat money, that it causes the value of it to drop? Wow, and we wonder why other countries want to drop the dollar. How long do other countries have to wait for our government to pull their heads out of their back sides and wake up and stop the printing presses? Or is it ok for other countries economies to go under first before that happens?

Originally posted by wutone
China manipulates currency by buying U.S. debt. Does that mean Schumer wants China to stop buying U.S. debt?

Too late...China has already slowed its buying of US debt in preference for buying resources and stakes in foreign companies...

However, if the US wants to bite the hand that feeds it, go right ahead...Just dont expect the Chinese to continue to lend the US the amount of money its been used to borrowing at the rates its been used to...Look forward to borrowing it from other sources at higher rates...

And frankly all this talk of currency/trade manipulation coming from the US is hilarious...The US wrote the book on protectionism and stifling trade, the rest of the world just followed suit...

Originally posted by Retrovertigo

Originally posted by wutone
China manipulates currency by buying U.S. debt. Does that mean Schumer wants China to stop buying U.S. debt?

And frankly all this talk of currency/trade manipulation coming from the US is hilarious...The US wrote the book on protectionism and stifling trade, the rest of the world just followed suit...

Yeah exactly! this (oldest trick in the book) kind of propaganda/rhetorics of blaming an outsider are soley for domestic politics to take some measly political points, and is pointed & pitched mainly towards the average public masses inside the US in a lame effort to control the public opinion and an out of control domestic political situation.

By doing so the bought politicians can manipulate the masses and say; hey, look here's the big bad wolf responsible for our problems - and we are doing the best we can as corrupt politicians to talk BS about it to manipulate you!

Hilarious! considering that they are the manipulators and are the one's responsible for our current problems in the world economy which stemmed from from morally corrupted US financial intitutions on greedy Wall Street, who shattered the financial system with their toxic default swaps and other toxic derivatives. And are still continuing to do so with their morally corrupt betting against other countries and currencies during these financial crisis, while the rest of the world are working feverishly trying to stabilise the systems and to find solutions to clean up this mess.

This is economical warfare against the rest of the world by a few morally corrupted & greedy US institutions and corporations, with the help of their political henchmen who are working inside of the political system.

The only solution for the rest of the world is to regulate them out of the markets and take away their means to survive by denying them access to do their morally corrupt dirty business, and to implement a new world reserve currency which would take away the most unfair advantage they hold against the rest of the world since the Bretton Wood agreement was implemented 1944.

The voices raised for the newly proposed EMF is one such example in that direction. The request to use SDR is another example.

Unfortunately this would also mean a NWO for all of us - for good & bad

But thankfully, it's common knowledge to the rest of the world by now that most of these corrupted & greedy politicians, financial & political journalists and bloggers who continues to spew this utter rubbish, are also bought and are under the influence by the same morally corrupted lobby and insanely greedy financial institutions who brought this mess upon us!

These people should be very ashamed of themselves!

thats hilarious, us senators passing bills to tell china what to do... thats great fellas

The problem with China is that they keep their currency rates artifically low. They do this to maintain their slave labor force. Nobody in the world can compete with the wages the Chinese pay their workers.

This is how they got almost all the manufacturing jobs from America and how they keep their population poor and compliant.

The currency rates should be allowed to increase just like the rest of the world so they have to compete on a level playing ground.

Given the amount of debt that Britian was in post WW2, no wonder the US stepped in a took the mantle as Super Power..

The was a natural shift in power and had the UK borrowing off the US. The debt curtailed Clement Attlee's plan to create his New Jerusalem (including the Social Health care he wanted)

And we see the same thing being repeated here with the US and China, with Obama seeking a similar situation, and at a similar point China will exert their power and curtail Obamas plans by refusing to buy more US debt.

That is, unless there is a dramtic shift, unless there is that shift, this will end the same way with the eventual decline of the US and Rise of China..

No wonder there are people in the US dedicating themselves to stop and reverse this trend, as at some point the US will decline the way Britain did.

Edit to add:
I wonder if that hasn't actually happened recently when China dumped US debt! debt that it appears the UK picked up! If that is so, then I would expect this type of thing to start escalating.

[edit on 17/3/10 by thoughtsfull]

Well let the trade wars begin.
Not a good idea to try and tell China what to do, they do just the opposite out of spite. China's currency is a monolith just get use to it. We need to start cleaning up our own house before we try to till them how to run there’s.