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Good News For US Manufacturing


Ajijic

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Many would disagree with you. The Canadian government repeatedly tries to talk down the C$ knowing how much it affects exports. Why do you think Europe, US etc all try to have the Chinese juan allowed to rise to its true value?

Doolittle's comments below about the juan confirms my point.

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Having a weak currency is NEVER good news. If that was true then having a worthless currency would be best.

Depends if you're a buyer or a seller, importer or exporter, investor or investee, inbound tourist or outbound tourist, etc. Having a worthless currency would be good for some of those folks. Have you ever traveled to a country with a worthless currency? the people just use something else as currency.

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Many would disagree with you. The Canadian government repeatedly tries to talk down the C$ knowing how much it affects exports. Why do you think Europe, US etc all try to have the Chinese juan allowed to rise to its true value?

Disagreeing doesn't make them right. Countries with a positive trade balance can enjoy the benefit of a weaker currency if they are in competition with those with stronger currencies. Otherwise no. In the case of the USA since their trade balance is negative a weaker currency hurts more. The weak currency makes the imports cost more. Sure, their exports sell for a lower price but given the difference the negative trade balance just gets worse. Do the math. The media who write article saying a weakened currency has benefits are naieve. Governments always tell the public that a weaker currency is good news are just pandering to the ignorant. A strong currency is good, a stronger currency is better, the strongest currency is best. It's always been so.

As to your question about the Yuan, at current artificial exchange rates (the Yuan is pegged to the $US) the Yuan is far too cheap giving China an unfair advantage in trade. If the currency was floated and allowed to seek its market value China would not be the bargain house it is today.

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