The Proposed Bill, Currency Exchange Rate Oversight Reform Act Of 2013

Chapter 11: Global negotiations leave groups more fortunate. A government that is purposefully maintaining inflated currency is robbing buyers of imports and creators of exports. A deflated value has an opposing effect, making imports cheaper and exports less challenging. One piece of currency across the west reduces negotiations and encourages price transparency. However, the United States as an individual country are

China has become a perceived threat to the U.S. economy because of the increasing trade deficit between the two countries, their ability to undercut production costs of similar products produced in the United States, and the amount of leverage that China has over the United States due to amount of money that has been lent by China. Although the United States has taken steps to close the trade deficit, such as convincing China to raise prices on their exports, there is still a considerable gap (Prasad). The United States government continues to print money that they simply can’t afford, therefore, relying even more heavily on China sustaining the value of their currency. Unless the United States is able to close the trade deficit and regain control of our economic flexibility, the problems caused by foreign countries owning our debt will remain eminent.

In conclusion, I think that China should change its policy because it is damaging not only the U.S. economy but the economy globally. Countries such as the United States are still recovering from the economic recession we are still leaving in. It is obvious that if China let the Yuan appreciate their exports will decrease and imports will increase making their trade surplus to decrease. If this happens international countries will be grateful because by this happening means that their export will increase and employment will increase. Countries should avoid doing currency manipulation or artificially devaluing their currency because it just hurts the global economy and it promotes other countries to do the same – it hurts everyone.

Which goes back on how the dollar is back up. Another deal that countries see is that they can also exchange the Yuan which they have, to the federal banks of China into gold since their money is control in a gold standard economy.

“A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation.” – Ross Perot. The words of the 1992 Presidential candidate still ring true today, and in fact they have since the abolition of the gold standard in 1971 by President Nixon. Ever since that warm August day the United States has been on a death plunge into immaculate amounts of debt. However, by the establishment of the silver standard in the way I will explain to you today, makes it clear that action on such a policy must be taken.

The financial crisis of 2008 has been described as the worst financial crisis the world has seen since the great depression, but there are now murmurings of the potential for an even greater financial crisis, a currency crisis, caused by the demise of the US Dollar. The Dollar has been the reserve currency of the world since it took over from the Pound at the end of world war two, but we examine if it is about to crash spectacularly?

With the continuous decline of the United States economy, it leaves us to wonder if there is anything that can be done to stop this degradation. There are several economic policies that can have different effects towards the stability of our countries currency, but one that stands out is the issue of returning to a Gold Standard. Would this be the best course of action, or would it further the problems we currently have, or would it even be better to look at an alternative solution to moor our currency? Understanding these solutions will greatly benefit those of us who live in the United States and can even have a large effect on the world. Those who understand these issues have the knowledge needed to help us make a decision on what would be best for our country’s economy.

The internet has allowed the money market to operate 24 hours a day. It has been noted however that exchange rate volatility has increased,[v] which makes it more difficult for the government to set monetary policy.

1. What are the implications of China’s exchange rate policy on doing business with and “against” China?

The United States of America has enjoyed the strongest economy on the face of earth for quite a long time (Index Mundi, 2012). It has also enjoyed the portion of eminence on political platform. Having owned the valuable resources, the economy has gained high importance for both developing and developed nations. The currency of USD is assumed to be the common medium of transaction at international level and it is also a benchmark to calculate the value of other currencies.

In today’s economy, the American public has raised the question of the value of the American dollar and how the changes are going to affect this world. The value of the dollar is considered to be less than it was many years ago. Our economy has been threatened by inflation and it does affect the value of the dollar. The dollar has lost more than half of its value and it doesn’t buy as much as it used to. However according to Nguyen” the dollar is gaining momentum. The dollar gained for a second day after a report showed U.S. durable goods orders exceeded forecasts in July, bolstering the outlook for economic growth” (Nguyen 2015).

China, the largest growing market in the world, currently has a policy regarding monetary regulation that allows the Yuan to “float”. This has seen the Yuan appreciate by approximately 24% over the past few years. Today, the exchange rate between the Chinese Yuan and the American Dollar is approximately 6.3 Yuan to 1 Dollar. Some argue that China should revalue the Yuan again the dollar, establishing a more fixed exchange rate. Others believe that current should allow

Finally given the slowing economy in Asia the International Monetary Fund (IMF) has reclassified the yuan. Previously the IMF considered it to be “substantially undervalued” compared to other currencies. The IMF has softened its tone toward the Chinese yuan and it is now considered “moderately undervalued”. This new designation makes it harder for the United States government to make a case against and therefore policies to target the imports based on the Chinese yuan. (Davis, 2012)

Secondly, the fixed dollar-pegged exchange rate system and monetary policy, the independence of the existence of a fundamental conflict, undermine the effectiveness of monetary policy cannot meet the needs of economic development. Monetary policy autonomy is essential for China’s macroeconomic stability; monetary policy should take precedence over the independence of significant exchange rate stability. But the Yuan against the U.S. dollar exchange

Our Currency, Your Problem is a case involving the issue of exchange rate regimes and the impact currency manipulation has on economies and trade. The United States and Europe argued that the Renminbi (RMB) was undervalued and claimed that the People’s Bank of China (PBoC) deliberately manipulated the exchange rate to lower the prices of exports, which caused the US and Europe to run huge trade deficits with China.