Американская валютная атака уже однажды помогла
низвергнуть Чан Кай-ши:
This isn’t the first time America
has used currency as a secret weapon to destabilize China.
Настоящее - это хорошо забытое прошлое.
In the early 1930s, China was still on the silver standard and the United States
was not. Accordingly, the Chinese yuan-U.S. dollar exchange rate was determined
by the U.S. dollar price of silver.
During his first term, President Franklin D. Roosevelt delivered on his
Chinese currency stabilization “plan.” It was wrapped in the guise of doing
something to help U.S. silver producers and, of course, the Chinese.
Using the authority granted by the Thomas Amendment of 1933 and the
Silver Purchase Act of 1934, the Roosevelt
administration bought silver. This, in addition to bullish rumours about U.S.
silver policies, helped push the price of silver up by 128% (calculated as an
annual average) in the 1932-35 period.
Bizarre arguments contributed mightily to the agitation for high silver
prices. One centred on the fact that China was on the silver standard.
Silver interests asserted that higher silver prices — which would bring with
them an appreciation of the yuan against the U.S. dollar — would benefit the
Chinese by increasing their purchasing power.
As a special committee of the U.S. Senate reported in 1932: “Silver is
the measure of their wealth and purchasing power; it serves as a reserve, their
bank account. This is wealth that enables such peoples to purchase our
Things didn’t work as Washington
advertised. It worked as “planned,” however. As the U.S. dollar price of silver
shot up, the yuan appreciated against the dollar. In consequence, China was
thrown into the jaws of the Great Depression. In the 1932-34 period, China’s gross domestic product fell by 26% and
wholesale prices in the capital city, Nanjing,
fell by 20%.
In an attempt to secure relief from the economic hardships imposed by U.S. silver policies, China sought modifications in the
U.S. Treasury’s silver-purchase program. But its pleas fell on deaf ears. After
many evasive replies, the Roosevelt
administration finally indicated on Oct. 12, 1934, that it was merely carrying
out a policy mandated by the U.S. Congress.
Realizing that all hope was lost, China was forced to effectively
abandon the silver standard on Oct. 14, 1934, though an official statement was
postponed until Nov. 3, 1935. This spelled the beginning of the end for Chiang
Kai-shek’s Nationalist government. America’s “plan” worked like a
charm — Chinese monetary chaos ensued. This gave the Communists an opening that
they exploited — one that contributed mightily to their overthrow of the
Ironically, now the shoe is on the other foot. As was the case in the
does not have a war plan, or even the idea of a plan, nor do I believe it knows
the meaning of the word “plan.” That said, if Beijing
caves into Washington’s
current demands for a yuan appreciation, the result is totally predictable. A
Chinese upheaval and a world disaster will ensue.
Fortunately, Premier Wen has studied the data. Since China embraced Deng Xiaoping’s reforms on Dec.
22, 1978, China
has experimented with different exchange-rate regimes. Until 1994, the yuan was
in an ever-depreciating phase against the U.S. dollar. Relatively volatile
readings for China’s
GDP growth and inflation rate were encountered during this phase. After the
maxi yuan depreciation of 1994 and until 2005, exchange-rate fixity was the
order of the day, with little movement in the RMB/USD rate. In consequence, the
volatility of China’s GDP
and inflation rate declined, and with the yuan firmly anchored to the U.S.
dollar, China’s inflation
rates began to shadow those in America.
entered a gradual yuan appreciation phase (when the yuan/dollar rate declined
in the 2005-08 period). Without a firm dollar anchor, China’s inflation rate picked up, relative to
inflation rate. And, yes, the volatility of China’s
GDP picked up and China’s
average inflation rate rose, too.
In addition to letting the data “talk,” Premier Wen must be also
listening to the echoes of Karl Schiller, German finance minister between 1966
and 1972, who pithily said: “Stability is not everything, but without
stability, everything is nothing.” Let’s hope he keeps listening.