Reprinted from RT
The yuan is about to enter the IMF's basket of reserve currencies this coming Saturday -- alongside the US dollar, pound, euro and yen. This is no less than a geo-economic earthquake.
Not only does this represent yet another step in China's irresistible path towards economic primacy; the Chinese currency's inclusion in the Special Drawing Rights (SDR) basket will also lead central banks and hyper-wealthy funds -- especially from the US -- to increasingly buy more Chinese assets.
At the first US presidential debate, Donald Trump took no prisoners, criticizing China's currency manipulation. This is what he said:
"You look at what China's doing to our country in terms of making our product, they're devaluing their currency and there's nobody in our government to fight them... They're using our country as a piggy bank to rebuild China, and many other countries are doing the same thing."
Well, China is not "making our product"; the manufacturing process is Made in China -- then exported to the US. Most of the profits benefit US corporations -- everything from design, licensing and royalties to advertising, financing and retail margins. If the mantras manage to spell out a partial truth - the US has lost manufacturing jobs to China, China is the "factory of the world" -- they don't spell out the hidden truth that those who profit are essentially major corporations.
China does not "devalue their currency"; the People's Bank of China periodically adjusts the yuan according to a very narrow band. The major practitioners of quantitative easing (QE) are actually the US, as well as Japan and the European Central Bank (ECB). And the currency of global consumer goods manufacturing continues to be the US dollar, not the yuan.
Of course the price of a Made in China product in the US is low -- and that is "incentive" enough for US companies to essentially keep Main Street USA unemployed. As Steve Jobs once famously proclaimed, "these jobs are not coming back."
The US dollar exchange rate will continue to be high as long as China -- and others -- recycle their excess US dollars to buy US Treasury Bills en masse. The crucial point is that these US dollars never enter the real economy. They are sort of "trapped" either in the extremely cozy upper strata of Wall Street casino capitalism or Too Big To Fail rarefied banking. And the Fed wants the game to go on indefinitely, to prevent a rate collapse.
Beijing for its part plays the game with relish; as the prime global export powerhouse, the agenda is to solidify -- and expand -- manufacturing know how on the way to achieve a status of "moderate income" nation by the start of the next decade.
The bottom line is that to recover US manufacturing jobs -- as Trump has been forcefully promising -- he will have to stare down the whole Wall Street finance oligarchy.
So no wonder these oligarchs -- responsible for shipping all those US manufacturing jobs to Asia and lavishly profiting from bailouts to the "Too Big To Fail" racket -- hate him with all their golden-plated guts.Hell-firing those Too Big to Fail
For all his incapacity to formulate thoughts above the language skills of a third grader, Trump has been piling up astonishing proposals that resonate wildly, way beyond the "basket of deplorables" spectrum.
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