China’s Currency Chiropractors

Timothy Geithner, the newly appointed head of the U.S. Treasury department and President Obama’s mouthpiece on matters of economic importance, recently said “China is manipulting its currency.”  The implication was they should stop being unfair to our dollar.  Ironically, since the Chinese keep their Yuan fairly well aligned with our dollar, they prevent import costs on multitudes of items from soaring.  Since they make all this stuff, allowing the dollar to devalue against their currency would hardly benefit the American consumer in these tough times.  Additionally, as the top foreign holder of U.S. Treasuries, we really don’t want to give them a reason to consider those holdings unattractive through such devaluation.  A spokesman at the World Economic Forum currently being held in Davos, Switzerland agreed, saying Geithner’s comments are “a horrible idea.”  Perhaps instead we should thank the Chinese for manipulating our currency as they manipulate their own.