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change that is over-due (Reuters) - Billionaire investor George Soros considers the global currency system "lop-sided" and "controlled" by China, and urged the Asian giant to allow its currency to appreciate. Soros' comments to BBC radio on Friday, broadcast on Saturday, come as global finance chiefs at a meeting in Washington seek to prevent tensions over currency valuations from derailing a fragile economic recovery. "One of the basic imbalances that was at the root of the financial crisis and which needs to be corrected is the chronic (trade) surplus in China and big deficit in the United States," Soros said, referring to the 2008 financial crash. China has kept its yuan currency undervalued in a managed float to keep its exports competitive. "Certainly a better alignment of those two currencies would help over time to correct that imbalance," he added. At annual meetings of the World Bank and the International Monetary Fund (IMF) on Friday, finance ministers and central bank governors repeated a call for export powerhouses, such as China, to spend more at home so indebted countries, like the U.S., can rebuild their finances without risking a still-fragile global recovery. Officials worry that a weak U.S. dollar and relatively strong currencies elsewhere could push nations into a round of currency depreciations to help their exports. Soros said China's currency should be allowed to appreciate, but a sudden jump of 20 percent or more would lead to reduced exports and unemployment in China, reducing consumption there. "So you can't adjust the exchange rate too rapidly, but 10 percent a year should definitely be doable. That would mean that you take two years to get 20 percent." China, which has rebuffed calls from the West to let its currency rise faster, allowed the yuan to firm on Friday to its highest level against the dollar since a revaluation in July 2005. The IMF and World Bank meetings continue over the weekend. (end) Nations around the globe are as much to blame, they all rushed to china to get what they thought was a new slave labor force, and resulted to decimate their own economies, by transferring all their industry to China. Unfortunately, China too should have been smart to manage what was transferred to its soil, not only to keep its people from being used, but to foresee the imbalance that would be created globally, and the pressure that would come along with this imbalance. But China wanted to rapidly employ its people, and ignored the consequences of such a rapid rise by the methods it came to be. World economist were in a blind stupor, to not forsee the disaster unfolding, as nation upon nation found higher and higher unemployment in their respective lands, while China employed 100's of millions, and equally so, 100's of millions became unemployed in other nations around the globe. IF China had insured that its citizens were becoming consumers of global products, and improved their import and internal sales of imports, this situation may well have been avoided. but instead of improving its imports, it blocked imports of every category, and fought against imports continually. and now the imbalance is 'full blown", and on the verge of each nation engaging in protectionism, and anti-China goods. the world community is not seeing, that the flood of disposable cheap goods, is a full circle loss scenario. The countries who turn to again making 'quality products", in their own lands will uplift their own nation, We saw in Japan, they have not reached the height of the days they sold cheap goods, but they have turned their focus to making 'quality products', they may not export as much as they once did, but they have a strong suit in the quality products they produce, and they are continually making adjustments, to convert more of what they produce to be 'quality products".. America has to learn this lesson equally so, and go back to making quality products, and curtail its spins of trying to bankroll the world, and make other nations step up, when there is crisis in other parts of the world. Global currencies will have no choice but to adjust downwards, to make the economics function. The days of the opulence of imbalanced currency is a thing of the past. The Post World War II imbalance in production capacity is no longer a reality, today the world nations that were one unable to be producers, are now producers, and to make global trade work, is to make global currency modification, so that trade returns to some level of balance, bi-laterally. change that is over-due Today, Chinese Millionaires are making the same mistake that Japanese Millionaires made, and the same Mistake that the once upon a time British Millionaires made, and the long ago mistakes the Argentinian Millionaire made, and the mistake the American Millionaires made. The model of the "Greed Monster" does not work anymore, nor does profane opulence gain any social progress for nations. Just like the days of the Rolls Royce declined, so too will the days of the exaggerated opulence decline and taper in the lives of the wise, as they learn that national strength and performance in the everyday peoples lives, becomes more a value point, that the delusion of the gilded age, based on 1920's excesses. change that is over-due .... |
