Treasury Secretary Henry Paulson testified before the Senate Budget Committee yesterday.  Chief among the topics of discussion was a potential economic stimulus bill.  However, Paulson was also queried about Congressional efforts to address China’s artificially devalued currency.

“Bordering on the silly” was Paulson’s view of such legislation targeting China’s illegal undervaluation. 

Verging on DoubleSpeak, Paulson stated: “I have engaged very actively with China. Engaged — and I think with some results — when you look at the currency.  Don’t be confused by the fact that I say I’d like them to move quicker, because I would like them to move quicker but their rate of appreciation of the currency roughly doubled last year to 6.7 percent.”

Most economists estimate the Chinese yuan to be at least 40% undervalued—creating an artificial subsidy for Chinese exports.  This currency rigging has been going on since 1994, so it’s hard to say what timeframe Mr. Paulson is looking at when he celebrates a 6.7% rise in the currency.

Time passes, though.  Civilizations rise and fall.  Nero fiddled while Rome burned.  The Treasury Secretary chats up Beijing while U.S. factories fold.

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This entry was posted on Thursday, February 7th, 2008 at 11:42 pm and is filed under Holding China Accountable, Currency Manipulation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.