Tag Archives: Trade

Clash of the Trade Titans a Disappointing Sequel

By Andrew Busch | Published: April 5, 2010

As most know by now, the US Treasury Department has put off releasing their bi-annual currency manipulation report. As you may remember from the Bush administration, this behavior is nothing new.

First, a bit of background. With the help of the IMF, the Treasury is instructed to analyze and report by mid-April on who is unfairly manipulating their currency. The term manipulation is narrowly defined as “for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.”

When I was acting as an outside advisor to both US Treasury Secretary John Snow and Hank … …READ MORE

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The Krugman and I

By Andrew Busch | Published: January 5, 2010

On Sunday, Paul Krugman wrote an op-ed for the NYT on his China fears. One of the major themes that Krugman (and I) are concerned about is the imbalanced adjustment process for the US weak economy via currencies. In a free floating regime, the country that is experiencing weak or negative growth sees its currency weaken against others to help stabilize the economy via increased exports. However, this is not the case when China pegs its currency to the US dollar. As Krugman explains succinctly, “At this exchange rate, Chinese manufacturing has a large cost advantage over its rivals, leading … …READ MORE

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China and the New US Treasury Nominee

By Andrew Busch | Published: March 24, 2009

In an essay released Monday in Beijing, Chinese central bank governor Zhou Xiaochuan called for a creation of a new currency to eventually replace the US dollar as the main global reserve currency. This joins Russia in making a call to shift the global economic fulcrum away from the policies of the United States and wealthy nations. The currency impact was immediate as the Chinese Yuan dramatically strengthened in off-shore (NDF) trading.

As the world’s largest holder of US dollars as a reserve currency and US Treasury securities, China appears to be growing more and more assertive over it’s rights. … …READ MORE

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