Regardless of who the President is, he needs a thick skin. Certainly, President Obama does as he begins the G-20 Summit in Korea. It may even be deserved.
For years, we have criticized China for maintaining an artificially cheap currency, which helps their exporters. With QE2 or quantitative easing, we are greatly increasing the supply of dollars, which reduces the value of each dollar. Not surprisingly, the dollar has been declining for months. This is good for American exporters. It is also good for those nations who have pegged their currency to rise and fall with the dollar. But, it is very bad for everybody else, which is the reason Obama is arriving at the Summit amidst a firestorm of criticism.
It is another reminder that each nation will behave in their own best reason. Now, why is that news? Did anybody expect us to behave differently, just because the dollar is the world's only reserve currency? Well . . . yes!
Don't call me a currency manipulator . . . you currency manipulator!
