Saturday, October 15, 2011

Currency Manipulation -- Q-and-A - Yahoo! News

Currency Manipulation -- Q-and-A - Yahoo! NewsTo most Americans, the trade in global currencies may seem something of an abstraction but not for those who shop at Dollar Store, Walmart and other vendors of low cost goods manufactured in China. Tariffs would result in higher prices to consumers.

What is currency manipulation?

In the U.S., "currency" means the dollar. China's currency is the yuan. There are things governments can do to increase or decrease the value of their currency. When one's own country acts to lower the value of its currency, it is politely called "monetary policy." When trade competitors do it, we call it "currency manipulation." There has been a strong inclination from some quarters in the U.S. to punish the Chinese for the influx of cheap imports. Tariffs are the instrument of punishment in S 1619.

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