Trade war is becoming a financial war.
| continue to a hot war?
Nobody likes to see this trend go on, although it is hard to prevend it.
Depreciation of RMB may ease the tarrif effect, promoting export. However, this is not a wise move to economy in a long run. No doubt that a production nation producing adequate goods for people's demand for daily life would eventually be a right way in normal economic operation. In this regard, domestic market is much more important than exporting goods to a consumption country lacking of capacity of production. In terms of production versus consumption, RMB has no reason to be devalued, but has much more space to appreciate, because physical laws cannot be wrong if not misled by so-called main stream economists. How to measure fortune is a key though, that needs be reconsidered. Again, physical economy matters. Virtual economy may create a beautiful picture of GDP, that needs be backed by a stong military. Otherwise, all paper fortune would disappear or evaporate when the stock markets crash! Unfortunately, people's memory is short, leading to another more bigger one than the 2008 financial crisis is approaching, which shall result in more servere consequence!
President Trump has noticed this problem for a long time even before becoming the president when he ran his business in New York and other places. That is why he wants to bring US companies back home and also to attract more manufacturing companies worldwide to the States to create more jobs for Americans. He also suggests that China is a country that manupilates its currency RMB letting it deappreicate to promote exporting.
Although I cannot agree with the viewpoint more, I have to point out that China currency RMB is much undercounted in its value for so long that have hurted its economy and people. Therefore, one RMB could be appreciated to about 1 international unit, that is currently the US dollar. In other words, 1 RMB equals to 1 US dollar if the physical laws work unbiasely in this world.
Intriguingly, the Democratic President Candidate Andrew Yang has raised an important question of how to measure GDP - a new parameter that requires to think harder - life expectancy, clean air and water, kids successful rate, etc. His new ideas are really making American think harder (MATH).
