AT ECONOMIC WAR WITH CHINA

[FOTD]

Too bad the trollers can't read this on TNF.

Anyway, looks to me like our politicians and our corporate business executives are traitors....

Dollar Slides After China Calls for 'Super-Sovereign' Currency
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZRxTYlhrMZM

By Oliver Biggadike and Bo Nielsen

"June 26 (Bloomberg) -- The dollar dropped against all of its most-traded counterparts after China repeated its call for a "super-sovereign" currency.

The greenback headed for its biggest weekly loss against the euro in a month after the People's Bank of China said the International Monetary Fund should manage part of members' foreign-exchange reserves. China is the biggest foreign holder of U.S. Treasuries, with $763.5 billion in April.

"The concern of reserve diversification is always lurking in the background," said Martin McMahon, a foreign-exchange analyst at Credit Suisse Group AG in Zurich.

The dollar weakened 0.8 percent to $1.4101 per euro at 8:34 a.m. in New York, from $1.3988 yesterday, extending its loss this week to 1.1 percent. The dollar will decline to a level between $1.50 and $1.60 euro in the third quarter, McMahon said. The yen weakened 0.3 percent to 134.59 per euro from 134.22. The U.S. currency fell 0.5 percent to 95.44 yen from 95.95.

The Dollar Index, which the ICE uses to track the greenback against the currencies of six leading trading partners, fell 0.8 percent to below 80.

"To prevent the deficiencies in the main reserve currency, there's a need to create a new currency that's delinked from the economies of the issuers," the People's Bank of China said in a review of the economy in 2008 released today.

People's Bank Governor Zhou Xiaochuan urged the IMF in March to expand the functions of its unit of account and move toward a "super-sovereign reserve currency." Russian President Dmitry Medvedev proposed on June 5 that nations use a mix of regional reserve currencies to reduce reliance on the dollar.

'Signs of Tensions'

China called on the U.S. to guarantee the safety of its assets in March, when Premier Wen Jiabao said the nation was "worried" about its holdings of Treasuries.

"There may be signs here of tensions mounting between the PBOC's economic concerns over China's holdings of dollars and the Chinese government's diplomatic reasons for doing so," Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, wrote in an e-mail message.

Japan's Nikkei 225 Stock Average rose 0.8 percent, climbing for a third day, and the Dow Jones Stoxx 600 Index of European shares advanced 0.2 percent.

"Gains in stocks are pumping capital into markets," said Masaki Fukui, a senior market economist in Tokyo at Mizuho Corporate Bank Ltd., Japan's second-largest publicly traded lender by assets. "The recent risk aversion strengthened the dollar as a refuge, but as risk appetite rebounds, higher- yielding currencies seem to be benefiting."

U.S. consumer spending increased 0.3 percent last month after no change in April, the Commerce Department reported today. The gain matched the median forecast of 76 economists surveyed by Bloomberg News.

To contact the reporters on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net

Last Updated: June 26, 2009 08:43 EDT

AND!


China Advocating "Buy Chinese" Clauses

http://www.economyincrisis.org/articles/show/3030

     
"According to The New York Times, the government in Beijing is asking that local municipalities try to "Buy Chinese" whenever possible in order to prop up domestic commerce.  This comes just days after China's President, Hu Jintao, met leaders from Russia, Brazil, and India to denounce protectionism.  It also comes on the heels of several months of animosity from the Chinese about proposed "Buy American" clauses in the United States.

     
China has been one of the loudest voices against the perceived evils of protectionism, yet this episode once again illustrates that China is indeed one of the most fiercely protected economies in the world. China clamors for "free trade" when it serves its interests, but the Chinese government easily switches over toward economic nationalism when it suits the country.

     
Thus far China has introduced a domestic stimulus plan valued at $586 billion – far smaller than the cumulative stimuli and bailouts in the United States.  Obviously it would make sense, and have the most stimulating effect, to make sure that money stays in the domestic market.  With major building projects to organize and equip "Buy Chinese" will force out foreign competition and favor newly created domestic heavy industries.

     
Foreign suppliers have been locked out of much of China's domestic economy for decades.  The only time a foreign company is allowed entrance is when it promises to build factories there and employ Chinese workers.  It must share its profits and technology in order to enter the coveted labor market.

     
The United States does not have any such restrictions yet it is constantly attacked, particularly from China, for being "protectionist."  The original "Buy American" proposals, which would only apply to a tiny amount of procurements, were vilified in Beijing, Paris, Moscow, and elsewhere around the globe.   

     
There is nothing wrong with China promoting domestic spending so long as it does not attempt to deny that same right to the United States.  As it currently stands the Chinese government is doing just that.  President Barack Obama has spent most of his presidency building coalitions and attempting to refurbish America's tarnished image, but now might be a good time to take a stand against the double talk and hypocrisy of our largest trading partner."


Too bad our own politicians advocate bleeding America dry. Boycott Chinese goods!