Speaking Chinese

Fact: China’s growth rate for the third quarter and the current U.S. unemployment rate are the same — 9.1 percent.

Talk about a depressing and ironic figure!

According to the Wall Street Journal, there is a bill in the House that would the government to use trade laws and international agencies to punish China if it doesn’t allow its currency to strengthen substantially. Supporters of the bill say that China’s policy of managing the yuan’s value against the dollar is one of the cause of America’s unemployment.

There are not too many more details on that as of yet, but we’ll see what comes out of it.

What do you guys think about that number? Cosmic coincidence or something more?

 

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One response to “Speaking Chinese

  • Jon

    The bill is a knee jerk reaction to a good situation dressed up as a bad situation. If china keeps devaluing their currency, we as American’s benefit by having cheaper goods. China benefits by have more people at work. These are Facts, the misnomer starts where “If punish china for keeping their currency devalue, jobs will come back to the states because the value of Yuan will increase against the dollar.” That is a possible but unlikely outcome.

    If you look at history, Smoot–Hawley Tariff Act of 1930 for instance. This bill pasted to protect the American worker, buy raising the price of foreign goods coming into the United States. In reality this “Protectionism” destroyed trade and increase unemployment. For example; if we put a 50% tariff on Chinese imports a lot of the products at Wal-Mart will increase in price by 50%. So consumers will have their purchasing power decreased by 50% in relation to those products. Thus lowering consumer demand and leading to layoffs at Wal-Mart. American made or Chinese made, if the price is too high no one will buy it.

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