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Subject ***US Fed Steps up Currency War against China***

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Original Message MORE NEWS ON USA BULLYING CHINA!!

On Wednesday the Federal Reserve board announced that it was going to print more money and place it into the economy. This creating new money is called “quantitative easing”. The Fed has announced that it is expanding the money supply by hundreds of billions of dollars. This move will significantly lessen the value of the US dollar as compared to many currencies around the world.

In recent months the US has been engaged in an economic conflict with China. The US needs to begin domestic manufacturing to recover from the global economic crisis. The return of manufacturing is the only thing that has ever pulled an economy out of recession, except it is not happening this time. China already has a strong manufacturing sector; it is the world’s largest exporter. They have had no trouble recovering from the recession; in fact they have had to slow their growth to avoid credit bubbles and possibly another recession.

Now the US can’t begin domestic manufacturing again because it is far cheaper for economies to import from China than the US. This is because of tremendously reduced labour costs. In other words, the US manufacturing sector can’t compete with the Chinese manufacturing sector. In order for the US to compete, China has to raise the value of the Yuan making their products more expensive. This would encourage foreign markets to buy from the US instead.

However China is unwilling to increase the value of their currency because they need the export based manufacturing to keep their economy going. So basically both China and the US need to export, but there is not enough buying going on to purchase both their goods.

[link to maoistrebelnews.wordpress.com]

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