Originally posted by Oerdin
Yes, in and of itself floating the currency won't balance things but it will let currencies fluctuate with real economic demand and it will end the very real economically distorting effects China's artificially low currency has created.
Yes, in and of itself floating the currency won't balance things but it will let currencies fluctuate with real economic demand and it will end the very real economically distorting effects China's artificially low currency has created.
The $, the Euro and the Yen are floating. The $ has had its value reduced by one third during the last three years WITHOUT causing any reduction in the trade imbalance which on the contrary has continued its rise. That is for the floating.
Regarding China, the US import trade with China represents only 20% of the imbalance.
The terrible thing with the current US problems is that they cannot have the solutions paid by the rest of the world, and that the solutions paid by the US consumers and/or taxpayers, are likely to cause a recession.
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