Carpe Diem

Quotation of the day on the Fed as a currency manipulator

…. is from the WSJ editorial today “Pacific Trade Protectionists“:

…labor unions and auto companies want the Trans-Pacific Partnership (TPP) to include a ban on “currency manipulation.” Their goal is to check Japan’s monetary easing, which has seen the yen lose about 20% of its value against the dollar over the past year, giving Toyota and other Japanese exporters an allegedly unfair advantage. More than 230 Congressmen and 60 Senators have called for a currency-manipulation clause in the TPP, including Ohio Republican and former U.S. Trade Representative Rob Portman.

But there’s a reason why past trade deals—including those negotiated by Mr. Portman—haven’t addressed currency manipulation: It can’t easily be defined. When does a central bank cross the line from prudently strengthening its foreign reserves to nefariously manipulating its currency? The yen has fallen in the last year, but only after having risen against the dollar by at least as much in recent years. And if the Bank of Japan is a manipulator for its recent quantitative easing, what does that make the Federal Reserve?

2 thoughts on “Quotation of the day on the Fed as a currency manipulator

  1. I suppose expecting economic literacy from Congress is a losing proposition, but this seems preposterous. BTW, Pethokoukis/AEI has been doing ace blogging on Fed policy.

  2. Pethoukis is a kloset Keynesian who has little greater grasp of economics that does the economic idiot and Democrat shill Paul Krugman. He advocates the currency manipulation of the FED. He suffers from one of the same blind spots as his hero (mentor?) Milton Friedman. Both say we should expand the currency, but do not define how an “adequate” supply of money is to be had without unfairly favoring the banks and their friends and without consistently increasing prices.

    Mr. Pery on the other hand, seems to have his head screwed on considerably more tightly.

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