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US may wake up to new reality soon

Comments on Wang Yong “Avoiding a US-China currency war: Need for rational calculation”, 11/04/2010, http://www.eastasiaforum.org/2010/04/11/avoiding-a-us-china-currency-war-need-for-rational-calculation/

Wang Yong assumes that the US will gain moderately from a trade and currency war between the US and China. It is puzzling how that would be the case.

Exports benefit an economy, so doe imports.

What will the US gain from a reduction in the availability of cheap goods?

What gains will Americans have if they have to pay higher prices for the same goods?

What if China also takes retaliatory measures to restrict exports from the US to China?

So it is difficult to understand the rationale of a possible US gain from a potential trade and currency war.

Wang Yong's presumption may have been based on the wrong premise that leads to the wrong conclusion.

Of course, the US political circles have been used to threat other nations if they don't follow its tune.

One day it will wake up to the new reality that its past practice will not work any more.

That day may be very near now.

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