Re: FW: Geopolitical Diary: China, Currency Manipulation and Congre

Paul,

Indeed I do, punitive tariffs always lead to war, so these politicians are
threatening war. It
looks like republicans will have to move over to the passenger side for a while
and let the
democrats drive in the same direction. The neocons are about permanent
revolution, and
permanent power, so they are preparing to do their backseat driving with the
dems at the
wheel. Rupert Murdoch, he of Fox news, is now doing fundraisers for Hillary.
Keep in mind
the patriot Act and the invasion of the middle east were suggestions the neocons
made to Bill
Clinton back in the ;90’s...as a way to change the subject from his scandals.The
neocons had
to wait for a man of lesser moral fiber than bill clinton to implement their
program. The
supreme court delivered that man.

With the blood of iraqis on the hands of both parties, the subject has to be
changed. So, it is
all the Mexicans fault for working here. It is all the Chinese fault for taking
the other side of
the USA currency policy bet. It's not our fault!

John

On Fri, 12 May 2006 08:44:27 -0700, "Paul Cifka" wrote :

> Hi John,
>
> I thought you might find this interesting.
>
> Best,
> Paul
>
> Paul Cifka
> Anzen Markets LLC
> Innovative Product Design, Trade & Marketing Specialists
> 1319 Dexter Ave N Suite 117
> Seattle, WA 98103
> (206) 310-6237 - ph
> (206) 374-8293 - fax
> paul@anzenmarkets.com
> www.anzenmarkets.com
>
>
> -----Original Message-----
> Subject: Geopolitical Diary: China, Currency Manipulation and Congress
>
> Geopolitical Diary: China, Currency Manipulation and Congress May 12, 2006
> 04 51 GMT The U.S. Treasury has decided it will not brand China as a
> "currency manipulator." The announcement brought an outcry from U.S.
> lawmakers on Thursday, with members of Congress demanding action to mitigate
> the trade imbalance with China. Barring a complete breakdown in Iraq or a
> sea change in relations with Iran, this issue will remain a hot topic until
> the November elections.
>
> Prior to the Treasury's announcement, several measures had been floated in
> Congress that would punish China for its policy on the yuan, which is seen
> as undervalued. But after Sen. Charles Schumer
> made a trip to China in March and returned to say that Beijing was making
> significant progress in addressing the trade imbalance, the discussion was
> put on a back burner.
>
> Now, the topic is heating up again on the Hill. The bill by Schumer
> (D-N.Y.) and Sen. Lindsey Graham (R-S.C.) would be the most punitive
> proposal, imposing a 27.5 percent tariff on all Chinese imports -- and it is
> now back on the table. Other measures have been put forward as well,
> including one by Senate Finance Committee Chairman Charles Grassley (R-Iowa)
> and Sen. Max Baucus (D-Mont.), which, unlike the Graham-Schumer proposal,
> does not hinge on China being labeled a "currency manipulator" in order to
> take effect. It also conforms to World Trade Organization rules in that it
> does not promote a blanket tariff; rather, it would allow Congress to impose
> broad penalties, such as blocking a country's voting rights in the
> International Monetary Fund, in the event of "currency misalignments."
>
> The congressional debate is being renewed in a period when Washington's
> approach to Beijing has seemed rather disjointed. On the one hand, the Bush
> administration publicly humiliated President Hu
> Jintao during his visit to the White House in April. But it also appeared to
> be offering an olive branch of sorts to Beijing shortly afterward, by
> denying Taiwanese President Chen Shui-bian
> permission to make a refueling stop in the continental United States en
> route to Latin America. The truth is, the United States cannot afford to
> alienate China completely, particularly while the matter of Iran's nuclear
> program remains unresolved. It is not so much that Washington needs
> Beijing's backing within the U.N. Security Council as that it does not need
> another fight on its hands while focusing on crucial issues in Iraq and
> Iran.
>
> Nevertheless, Congress felt the need to immediately adopt a tough stance on
> China. There are two reasons for this. For one thing, the Treasury's
> statement would tend to make the United States appear weak from a Chinese
> perspective -- and that will not bring Beijing any closer to revaluing the
> yuan. To date, the rhetoric from Washington has been just
> that: rhetoric. Lawmakers now are sounding a hawkish note to counteract this
> perception -- and for the second reason: There is an election coming.
>
> Congress will keep China's currency -- an issue that plays well with voters
> -- on its agenda prior to the elections, and a punitive bill that seeks to
> address the trade deficit likely will be passed during the campaign season.
>
> The Grassley-Baucus bill or a similar measure -- meaning one with sweeping
> implications but that can be loosely translated, and with no immediate
> action required -- likely will win approval not only in Congress, but with
> the Bush administration. For one thing, forwarding such a bill to the White
> House will allow lawmakers to be seen as getting tough with China (which is
> good for their image); in signing it, the president (whose approval ratings
> are hitting new lows) could ride the same wave. Second, there is vital
> "wiggle room" in a measure like Grassley-Baucus. After a "misalignment" is
> identified, the government has six months to determine whether the offending
> country has made progress (with the definition of "progress" left
> intentionally vague) in addressing that problem. During that time, the
> administration can work with the offending government to alleviate the
> problem, in ways that will not hurt American businesses.
>
> We would expect a bill to be passed before November's elections. Despite the
> conciliatory note struck by the Treasury Department, it is not in lawmakers'
> interests to promote closer ties with China at this time, as that would
> jeopardize votes. And unless Chinese support is viewed as vital on another
> foreign policy issue of greater importance to Washington, Congress will keep
> the heat on Beijing for some time to come
> -- even if the legislation being debated ultimately turns out to be more
> sound than fury.

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