Sen. Schumer: Your Wall Street Friends Are the Currency Fixers

Reports about the April 19 IMF report featured the warning of a general debt blowout if Greece leaves the euro, or the Federal Reserve raises interest rates too soon or too fast. But the report also contained a highly unusual and important admission: The biggest London banks have been running a trillion-dollar “carry trade” speculation into China, violating that country’s regulations and attempting to manipulate its currency, the yuan.

To take one exemplary story about the IMF report, that of Ambrose Evans-Pritchard in the London Telegraph April 20: “Borrowing in dollars outside the U.S. has surged from $2 trillion to $9 trillion over the past 15 years [due to Bank of Japan and Fed quantitative easing—ed.]. Half of this is now concentrated in emerging markets…. It includes at least $1.1 trillion of loans to Chinese companies, much of it through Hong Kong, and intended to circumvent China’s internal credit curbs. It is now clear that many banks and investors have been engaged in a currency “carry trade,” betting — wrongly, as it now turns out — that the dollar would weaken against the yuan.”

Much could be said about this in regard to why there are real estate and commodity bubbles in the Chinese economy.

But what is most relevant is that all of the trans-Atlantic governments, at every G7 and G20 meeting of this century, have relentlessly demanded that China allow the value of the yuan to rise, backed by tirades on the subject from members of Congress and European parliaments and from nearly all trade unions, chambers of commerce, etc.

It turns out, that they were all screaming at China, all that time, to support the City of London banks’ Hong Kong carry trade speculations, which required for their super-profitability that the yuan keep rising in value. Under that international pressure China did allow the yuan to rise, slowly but steadily, for years.

But the government of Xi Jinping reversed that policy in 2014, in order to finally enforce its own currency-control policies, which Evans-Pritchard referred to, against the operations of the London banks in Hong Kong.

Result: London and Wall Street speculations “reversed,” and big banks lost money. Result: Now some Congressional Democrats object to Obama’s Trans-Pacific Partnership (TPP) swindle, not so much because it is an attack on the United States, but that it is not enough of an attack on China. Like New York Sen. Chuck Schumer, they say they oppose the TPP; but, they might vote for it if accompanied by a “currency manipulator” designation on China.

Tell the truth, Senator: It is your “constituents” in Wall Street boardrooms, led by their more clever London counterparts, who have been manipulating China’s currency, along with rigging international interest rates, foreign exchange markets, gold prices, etc., etc. That has ended with the emergence of the new policy of the BRICS. Obama’s TPP is part of an attempt to provoke war with China and Russia. Oppose him.