A Quote by Charles Dallara
Threats of trade protectionism, plus unilateral actions on the exchange-rate front, such as the heavy interventions of China, Japan, and Switzerland in the currency markets - not to mention the retaliatory tariffs recently passed by the U.S. House of Representatives - endanger growth prospects and could further depress financial market confidence.
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The lesson for Asia is; if you have a central bank, have a floating exchange rate; if you want to have a fixed exchange rate, abolish your central bank and adopt a currency board instead. Either extreme; a fixed exchange rate through a currency board, but no central bank, or a central bank plus truly floating exchange rates; either of those is a tenable arrangement. But a pegged exchange rate with a central bank is a recipe for trouble.
The E.U., China, and Japan all talk free trade, and they all practice protectionism.
The principal linkages between Japan and the U.S. global economies are trade, financial markets, and commodity markets.
What [Donald] has put up for question is this idea of tariffs. Initially, he said if China won't stop taking advantage of us and manipulating their currency, then I will put tariffs in place. That spooked everybody because if you charge China a fee and an extra tariff for anything they bring into the United States, what's going to happen is that companies carrying those goods are going to raise prices. It's going to be expensive for people. People got scared of that, but then he walked that [idea] back. I don't think anybody is expecting heavy tariffs on anything.
The U.S. berates China for its exchange rate policy, which Washington doesn't like. But one-sided pressure on China to change its exchange rate is misplaced.
My single biggest financial concern is the loss of the dollar as the reserve currency. I can't imagine anything more disastrous to our country. . .you're already seeing things in the markets that are suggesting that confidence in the dollar is waning. . .I think you could see a 25% reduction in the standard of living in this country if the U.S. dollar was no longer the world's reserve currency. That's how valuable it is.
From 1947 to 2001, the American economy grew annually at a rate of 3.5 percent. After China got into the World Trade Organization, got access to our markets and flooded our markets with its illegally subsidized exports, we grew at a rate of 1.8 percent from 2002 to 2015. That's almost cut in half.
When financial sectors are small and capital is mobile, floating exchange rates spell massive currency volatility. When a lot of foreign capital flows in, a freely floating exchange rate rises sharply, wreaking havoc for domestic banks and exporters alike.
When China got into the WTO, that allowed it to sell into any other country within the WTO - not just the United States - at the lowest tariffs that country offered. And the other countries could sell into China at the lowest tariffs that China offered. The problem, right off the bat, was that China had much higher tariffs than everywhere else, so the U.S. and Europe in particular got the short end of that stick.
Protectionism is a misnomer. The only people protected by tariffs, quotas and trade restrictions are those engaged in uneconomic and wasteful activity. Free trade is the only philosophy compatible with international peace and prosperity.
I look forward to the day when China has a truly market-determined solution... To get there, you need to have a currency that is market-determined, an open capital market, and you are going to need a competitive, open financial system.
We have met our passion to be ambition to grow our market share significantly in North America. Motorola helps address two other priority markets for us - the acquisition has enabled us to become the No. 1 foreign vendor in Japan. It also gives us an increased market share with China Mobile in China.
In a world dependent on international trade and commerce, and staggering under a heavy load of international debt, no policy is more destructive than protectionism. It cuts off markets, eliminates trade, causes unemployment in the export industries all over the world, depresses the prices of export commodities, especially farm products of the United States. It is the crowning folly of government intervention.
With my support, the House of Representatives recently voted to permanently repeal the death tax so that family farms and businesses can be passed down to children and grandchildren.
Favouring employment versus the financial markets is a decent policy; certainly not beneficial for the currency or the gilt market, but beneficial for the people.
Switzerland has one of the highest per capita incomes in the world, the strongest currency and the largest financial center for foreign assets. And we're a small country with no natural resources. Switzerland is the world capital of dealing in stolen goods.
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