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Originally posted by Mmmm, Burger (C.J.)
What's teh mechanism to supress currency price? Selling a bunch of their currency, and printing more to fill its place? All that gets is rampant inflation, which has internal effects as well. Generally, it's pretty tough to affect currency prices other than by moral suasion, unless you have a really massive bankroll. Whatever you do ultimately reverses pretty quickly.
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They keep the currency pegged to the dollar. It does not float on the free market. The kinds of mechanisms that you identify are relevant only to a currency that floats, not to one that is pegged.
In other words, you don't know what you are talking about.
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Why are we worried about exports to China? If they don't want to buy our stuff, so be it (of course they steal it through IP, but that's a different issue). Plenty of other countries want to buy our stuff, and that's fine.
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They might want to buy our stuff if it were 30% cheaper, which it might be if their currency were freely traded. And they might not take so many manufacturing jobs from the US.
And, yes, the US consumer would suffer. But why should we protect the "right" to buy a $30 DVD player from the effects of the free market (free market including a free currency market), any more than we should protect US jobs?
I disagree with Ty's view about the need to protect people from the effect of the free market. But I don't think cheap consumer prices have any greater standing.
