Article • Dean Baker’s Beat the Press
Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.
Center for Economic and Policy Research
1611 Connecticut Ave. NW
Suite 400
Washington, DC 20009
Tel: 202-293-5380
Fax: 202-588-1356
https://cepr.net
Yes, the United States has officially been asking (demanding?, begging?) China to raise the value of its currency against the dollar. Yet, the media continually threaten the country with the story that China may sour on the U.S. and stop buying U.S. debt if we don’t get our budget deficit down.
However, if China stopped buying U.S. debt it would lead to a rise of the yuan against the dollar. This is exactly what the Obama administration has ostensibly been asking them to do.
In other words, China has no leverage in this picture. Their implicit threat is to do exactly what we supposedly want them to do. So why is the media trying to scare us?