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I recorded the video segment below on on RT America on Wednesday night (Notice my green tie for St. Patrick’s Day!). The overall gist of the clip was that the currency battle now brewing between China and the U.S. is mostly a political confrontation. There are reasonable ways out of this that don’t include a [...]

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Notable quotes in this 5 minute segment:
"They don’t want to look in the mirror. America doesn’t have a China problem. It really has a savings problem. America has the biggest shortfall of national savings of any leading country in modern history. And when you don’t have saving you have to run current account deficits to [...]

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Here’s how I see things playing out:

Congress looks at this report and concurs that the key to ending slower global growth is to correct global imbalances via a Chinese currency revaluation. Fair enough.
However, individual Congressmen, looking to reassure jobless constituents ahead of the midterm elections, will escalate by presenting bills to ‘punish’ China if [...]

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I am going to talk here a little bit about the looming trade war between China and the United States. But I am going to come at it from a side angle via some historical analogies.
Common folklore in the United States says that the Soviet Empire collapsed in large part due to the efforts of [...]

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With US midterm elections up ahead, we are already seeing political posturing by US politicians regarding China’s currency.  Democratic lawmakers are reportedly drawing up legislation that sets criteria on whether a country has a misaligned currency.  It would modify the current US Treasury semi-annual report to misalignment instead of manipulation.  The House Ways and Means [...]

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It’s curious how one and the same message is emanating from both Beijing and Berlin at the moment: “don’t blame us, it’s not our fault”. And it isn’t.
According to the Financial Times, the Chinese Authorities spent their morning pushing back against the mounting US criticism of their currency policy, arguing that their huge trade surplus [...]

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China
Britain warns China against protectionism – Telegraph
FT.com – China calls currency pressure ‘protectionism’
Chinese Premier Warns of ‘Double Dip’ Recession – WSJ.com
Paul Krugman – Taking On China and Its Currency – NYTimes.com
The more America huffs about the yuan, the less China will do about it – Telegraph
Is China’s Politburo spoiling for [...]

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The Financial Times has caught wind of a letter sent by U.S. Treasury Secretary Timothy Geithner to to the EU’s Michel Barnier. In only thinly-veiled language Mr. Geithner accused the EU of financial protectionism for the way Brussels is moving forward with rules to regulate hedge funds and other parts of the shadow banking system. [...]

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This is an update on trade and protectionism because the last posts I wrote on protectionism were in December. Since then, the only two major events on the protectionist front happened last Friday.
Canada and the Buy American Fiasco
The National Post of Canada trumpeted Protectionism ‘breakthrough’ reached on Friday because Canada received an exclusion to the [...]

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This comes via Reuters:
China’s announcement on Thursday it would slap punitive tariffs on a type of electrical steel used in transformers is likely to hurt exports from leading U.S. producers AK Steel and ATI Allegheny Ludlum.
The move follows U.S. steel industry trade cases against China that led Beijing to accuse Washington of protectionism.
"This shows clearly [...]