Reply To: Currency Manipulation


Romney repeatedly called China a currency manipulator because China has artificially decreased the value of their currency (by increasing money supply). As a result the US Dollar might buy more Renminbis and it’s cheaper for Americans to buy Chinese products than American products. This is according to Romney. He does not mention that the Fed has decreased the purchasing power of the US Dollar for years and that other Central Banks do the same to the currencies of their countries. Moreover Romney said that he favored tariffs to make it more expensive for Americans to buy Chinese products which protects American industry. American consumers would undoubtedly be harmed.
Regarding Iran, a currency can not only fall due to an increase in the money supply but also due to a decreased demand. Sanctions are hurting the Iranian economy which results in a lower demand for the Iranian currency.