Japanese and German Currency Manipulations Harming Other Countries

Ìn a 2009 meeting of the finance ministers and central bankers from the G-20 countries, in Scotland, there
was concern raised about the massive trade deficits that the United States has with the rest of the world.
The trade deficit that the United States has with the rest of the world has increased massively in the last
ten years. One indicator of the increase of the US trade deficit in goods with other countries is the
difference in the trade imbalance the U.S. has with the rest of the world in 2008, compared to 1997. Ìn
1997, the trade deficit in goods between the U.S. and the rest of the world was a U.S. dollar value of
$180,531,563. Ìn 2008, the trade deficit in goods between the U.S. and the rest of the world had
skyrocketed to $816,198,714.
One of the primary reasons for the massively increased trade deficit that the United States has with the
rest of the world over the last ten years was a large drop in the exchange rate value of most other
countries currencies in the world against the U.S. dollar. To all apparent this appears to have been
planned and timed action and it appears to have been done specifically to target the U.S. economy and
other nations negatively.
An example of a few currencies and the foreign exchange rate differential with the U.S. dollar between
1997 and 2008 are: The Japanese Yen which went from an exchange rate of 0.00859623 at the start of
1997 to an exchange rate of 0.00922679 at the start of 2008. For the Euro, the exchange rate per the
established rate of the Euro in 1997 at 1.239 to 1.476 in 2008. For the Canadian dollar the exchange rate
went from 0.727696 in 1997 to 1.0012 in 2008. The Mexican Peso in that time period went from 0.127065
in 1997 to 0.0915164 in 2008. The Chinese Yuan went from 0.120073 in 1997 to 0.137561 in 2008. For
most of the U.S.'s trading partners in this period what was seen was a large and substantive drop in the
value of their currencies vis a vis the U.S. dollar.
Ìn looking at the exchange rates year after year between countries as well what is also evident is
unnatural and very fixed "exchange rate numbers¨ that appear to have been fully manipulated and
controlled. What is supposed to occur with free trade between countries is a process whereby as trade
imbalances rise, the currencies readjust in relation to the imbalance. Not only did this not occur but what
was seen with the currencies of the world in relation to each other and the U.S. dollar was a marked
"fixedness¨ over periods of time that indicates that currencies of the world are being fully and externally
controlled and manipulated to harm specific countries and benefit others.
The two countries with the long history of this since the post World War Two period have been Japan and
West Germany. Japan and West Germany, from the years 1949 through the early 1970's, both
manipulated their currencies so that the exchange rate value of the Japanese Yen and the West German
Deutschemark were exactly the same vis a vis the U.S. dollar. These two national currencies, and these
two national currencies alone, never appreciated against the U.S. dollar and some other currencies,
leaving these countries with massively undervalued currencies against the U.S. dollar and other
countries.
While the Japanese and West German economies went from their immediate post World War Two
shattered economies in 1949, to being the third and fourth largest in the world in the early 1970's, their
currencies never rose in relation to the U.S. dollar and other currencies, through constant currency
manipulation and intervention by the Japanese and German governments. No other countries followed
this policy of currency intervention to the detriment of other countries.
While Japan and Germany racked up massive trade surpluses with their undervalued currencies in these
years, they jointly economically targeted foreign industries from steel, shipbuilding, machine tools,
cameras, electronics, and many other industries and sectors, either weakening other country's companies
or driving them out of business.
What has been seen since the end of the Bretton Woods period in the early 1970's, is although there is
no fixed exchange rate policy, is a still remaining pattern of apparent planned currency manipulations.
And currency manipulations between nations that have served to detriment other countries and benefit
Japan and Germany.
While in the U.S. the last ten years has seen a large drop in other currencies against the U.S. dollar, there
have been statements and warnings made that the U.S. dollar is going to see another large move, in fact
a planned strong lowering or crashing out of the U.S. dollar against other currencies.
With many U.S. companies and industries having been destroyed in the last ten years, unable to compete
against the abnormally and unfairly low foreign currencies against the U.S. dollar, the U.S. is now in a
position where as a nation, the nation is no longer producing many of the goods that are purchased by
Americans. With a drop in the dollar's value against other currencies, these goods that now have to be
imported into the U.S. because companies that made them in the U.S. have been put out of business,
prices of goods will increase for all sorts of goods that are now no longer being produced in the U.S.
While it appears that the currencies of the world were manipulated to attack the U.S. and U.S. companies
by propping up the price of the U.S. dollar abnormally, it appears that it is now being planned that the
U.S. dollar will be dropped against other country's currencies and that other countries are being
persuaded to not purchase U.S. dollars so that the U.S. dollar will drop and stay low against other
country's currencies.
A few years ago, a Japanese government official at the Asian Development Bank, Masahiro Kawai, the
Asian Development Bank's head of regional economic integration said at a news conference that "Asian
countries need to prepare for a possible sharp fall in the dollar and should "allow their currencies to
appreciate collectively if that happens.¨ (1) Kawai then said that if the "U.S. dollar goes down in the future,
it would be best for East Asian countries to appreciate collectively,¨ so that the costs of adjustment could
be divided among them.¨
Japan as a nation has not only been advising other Asian countries what they need to do with their
currencies in relation to the United States, that would serve to be harmful to the United States and to the
East Asian countries themselves, but in the recent election the new Japanese Prime Minister stated that
he thought that the Asian currencies should all be combined into a single currency, led by the Japanese
Yen, similar to the development of the European common currency the Euro.
The euro came into being partly as a result of the use of the exchange rate mechanism in Europe in
1979 which kept European currencies fixed in a narrow exchange range vis a vis one another. Germany's
economic actions in unifying Germany served to economically distress the other nations of Europe as
noted in a Princeton study. (2) These countries found their currencies attacked by speculative attacks and
with Germany unwilling to change it's economic strategies that served to duress other European nations,
the resulting economic distress due to currency manipulations in other European nations served to
pressure the nations of Europe to join together in a common currency and thus the destruction of their
national currencies.
Just as the nations of Europe were pressured into the loss of their national sovereign currencies, by
Germany, so too does it appear that the Asian nations are now being pressured into the loss of their
national currencies by Japan. Ìt appears that actions to massively duress and lower the U.S. dollar
through coordinated and manipulated actions by the governments of Japan and Germany will also be
used not only to harm the U.S. and other countries economically but to force the U.S. into giving up the
U.S. dollar and hence control over it's own currency as is occurring in Europe and Asia through the
destruction of the U.S. dollar and either the establishment of a North American currency or the takeover
of the U.S. dollar by the euro.
Cited notes:
(1) 'Asian Development Bank Sounds Alarm on Dollar¨ New York Times March, 28, 2006
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(2) ÞrlnceLon SLudles ln lnLernaLlonal llnanceţ no 84Ŧ March 1998 ºlnLerpreLlna Lhe L8M Crlslsť
CounLrv Speclflc and SvsLemlc lssues" 8v Wlllem PŦ 8ulLerţ Clancarlo MŦ CorseLLl and Þaolo A
ÞesenLl hLLpť//wwwŦprlnceLonŦedu/Ƌles/lLS_SLudles/S84Ŧpdf


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