Any idea why China’s currency is being undervalued? Was it because they were doing it on purpose? I remember Western press being mad at them claiming that awhile ago lol.
From what I understand this is because the renminbi is not a convertible currency*. Wether you’re american, russian or chinese you can’t easily buy and sell yuan on forex exchange markets. What this means is that when China accumulates dollars, it invests those abroad (historically the US, now not so much for obvious reasons). This drives up the demand for dollars, and means that China’s trade surplus does not drive up the demand for yuan.
It’s probably just a case of America’s currency being overvalued, since china’s gdp has only fallen wrt America. As for why America’s currency is overvalued? Probably the result of the euro, the dollars main competitor, being shafted by the Ukraine war
In fact, the dollar was in a big slump during covid times (likely because the americans increased their money supply the most, and also because the slowdown in global trade hurts the imperial hegemon the most), and recovered right in the early stages of the war.
In concequence, right now, nominally speaking, America underwent significant growth. More accurately, you could say that the Ukraine war restored America’s power as the imperial hegemon after its corrosion during corona. This is also why liberal media and the DNC insit so much that the economy is doing great. From the perspective of the imperialists, it genuinely is.
Any idea why China’s currency is being undervalued? Was it because they were doing it on purpose? I remember Western press being mad at them claiming that awhile ago lol.
From what I understand this is because the renminbi is not a convertible currency*. Wether you’re american, russian or chinese you can’t easily buy and sell yuan on forex exchange markets. What this means is that when China accumulates dollars, it invests those abroad (historically the US, now not so much for obvious reasons). This drives up the demand for dollars, and means that China’s trade surplus does not drive up the demand for yuan.
Ah makes sense. Thanks!
It’s probably just a case of America’s currency being overvalued, since china’s gdp has only fallen wrt America. As for why America’s currency is overvalued? Probably the result of the euro, the dollars main competitor, being shafted by the Ukraine war
To understand this a bit better, look at this chart comparing the dollar to rmb and this one against the euro showing the dollar’s massive gain directly after the Ukraine war.
In fact, the dollar was in a big slump during covid times (likely because the americans increased their money supply the most, and also because the slowdown in global trade hurts the imperial hegemon the most), and recovered right in the early stages of the war.
In concequence, right now, nominally speaking, America underwent significant growth. More accurately, you could say that the Ukraine war restored America’s power as the imperial hegemon after its corrosion during corona. This is also why liberal media and the DNC insit so much that the economy is doing great. From the perspective of the imperialists, it genuinely is.
This is why i love hexbear. Some crazy memes mixed with some high quality effort posts with links and everything.