Thanks to Calculated Risk, we get some more information about the "transparent" goings on at the IMF. As readers here know, they are having an open meeting behind closed doors guarded by armies of military footsoldiers determined to keep any humans far away. Already, things are heating up.
The US administration is calling for China to move immediately to introduce a flexible currency, a marked shift in tactics after several years of patient diplomacy aimed at nudging China towards allowing the renminbi to float.
A senior US administration official told the Financial Times on Friday: “Action is needed now. This is a co-ordinated effort to get the message across.”
The decision to demand prompt action by Beijing comes in the face of growing pressure from the US Congress over the burgeoning trade deficit with China.
Officials acknowledge they were shocked by a 67-33 Senate vote this month to allow consideration of a bill championed by Democratic senator Charles Schumer that would impose a 27.5 per cent tariff on all Chinese imports if China does not revalue in six months.
Sorry, but China isn't feeling very cooperative this week. Not after Bush and Condi egged the Japanese into a fight over the China Sea oil by telling them, they back Japan millitarily no matter what and they will put Japan into the Security Council.
Turning into isolationists would send a terrible signal to the global trading community.” The message is being delivered to China at all levels in advance of this weekend's Group of Seven meeting in Washington. China, which has been a guest at the past two G7 meetings, is not sending its finance minister and central bank governor to the gathering.
Mercy me! As America bleeds to death in a sea of red ink thanks to us slitting our own wrists, we now warn the Chinese that we will take our Go stones off the board and cluster them into our bowl at the side of the board, ie, we will go home and cease our imperial operations everywhere. I can imagine the laughter this is causing across the planet! I often wonder, like the Monty Python WWI skit where the British troops are ordered to tell a German joke that will cause the Germans to laugh to death (and it works!), so Bush wants to kill our opponents by making them laugh to death?
“The administration believes that now is the appropriate time for China to adopt a more flexible exchange rate regime,” she said. “It is in China's best interest to adopt a more flexible currency now while economic growth is strong.”
Yes, change it to our system now so a strong Chinese economy can be weak? Or is this all about American worries no one's economy will be strong? And if America is strong now, why can't we manipulate things so we triumph? Why isn't Bush calling for a Bretton Woods III? After all, every time we stuck our foot in a bear trap in the past, we convened everyone and explained how we have to free our foot, ouch, and they cooperated, at a price, of course.
This particular trap wasn't set by the Chinese nor the Saudis. It was set by our own selves. We wanted to be in this trap. We dug the hole and then flung ourselves into this hole. We are still escavating like mad....note how deep the hole is! That patch of blue over our heads, the tiny spot, is the sky!
Taxes. We don't want to pay oil taxes. We don't want to pay Federal taxes. We don't want to pay our way. We want a free lunch, by dandy! So we will continue to beg everyone to change so we won't have to change.
The more things change, the more they change.