NPR: The Treasury Department Has Spoken. Kind Of.

The Treasury Department Has Spoken. Kind Of.

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Listen to Luke talk with NPR's Adam Davidson about the Treasury Department's report on China.

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It's all about the Mao Tse-tungs.

This morning after our editorial meeting, NPR's International Business and Economics Correspondent, Adam Davidson, left a voicemail that intrigued us. He was doing a report today about the Treasury Department's semi-annual report on whether the Chinese were manipulating their currency. The report basically said that, no, China does not meet the standards of what they would call currency "manipulation." But, what Adam wanted to report was that pretty much every business reporter and economist would like tell you that the report is not quite, well ... true. Of course the Chinese are manipulating their currency. Find out why the United States is unwilling to say that -- listen to the podcast.

Matt Martinez

5:04 PM ET | 06-13-2007 | permalink

Comments (Send a comment)

Well *I* (an American in Beijing) listen to your podcast regularly. I would like to comment on the currency manipulation issue. Yes, the Chinese manipulate the Yuan, not to keep it from rising against the dollar, but rather to control the rate or rising. China has about what? A trillion or so? of US dollars invested in US treasuries. If the Yuan were to change tomorrow to 6 vs. the dollar rather than the 7.7 or so it now is, guess what? The Chinese have just lost that much in their dollar investments. And guess what #2? Prices would rise in the US for everything we purchase from China. The exchange rate IS moving - about 18 months ago when I first arrived the Yuan was 8.2 to the dollar. And the Chinese keep the rate of movement per day confined, but like water seeking the sea, the Yuan will find its own level eventually. What the politicians ignore is the drastic effect that a forced Yuan float would have on the US economy. Inflation out the wazoo...
Everyone is lying, though. The truth is that it is in everyone's interest to allow the Yuan to gradually seek it's own level, rather than bomb the dam and let all that water out at one time.

I love your show - Rough Cuts podcasts - and your web site. Keep up the excellent work.

Sent by Bob Cummings | 2:37 AM ET | 06-18-2007

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