USA And The Future Of The World

[acharya]

<b>America Cannot Cheat China Like It Cheated Japan</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->For anyone who knows a little about how America has dealt with past financial crises, it is hard not to worry about the security of China's wealth. Historically, the U.S. dollar has depreciated after almost every financial crisis. The final result has always been that other countries suffer losses, while America successfully passes off the burden of the crisis. <!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->In 1971, because of the demands of countries vying to sell short their U.S. currency for gold, President Nixon flatly declared an end to the linkage of the U.S. dollar to gold. In the end, the United States survived the crisis by shirking its duty to other countries. In the mid-1980s, the U.S. dollar exchange rate greatly increased, hindering exports and causing a decline in manufacture. In 1985, the United States signed the “Plaza Agreement” with Japan and other countries, forcing the Japanese yen and other currencies to greatly appreciate, surviving a crisis once again, while Japan paid the price of having several years of economic stagnation.
<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->China is not the Japan of 20 years ago. Only by putting China at ease can America maintain its international reputation — and only then can America gain China’s support on many issues. This type of support for the America of today is something the United States cannot do without.  If Americans want to cheat China like they cheated Japan in the past, they will certainly lose the Chinese people’s trust, and cause U.S.-China relations to regress, resulting in both sides losing.
For anyone who knows a little about how America has dealt with past financial crises, it is hard not to worry about the security of China's wealth. Historically, the U.S. dollar has depreciated after almost every financial crisis. The final result has always been that other countries suffer losses, while America successfully passes off the burden of the crisis. <!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->In 1971, because of the demands of countries vying to sell short their U.S. currency for gold, President Nixon flatly declared an end to the linkage of the U.S. dollar to gold. In the end, the United States survived the crisis by shirking its duty to other countries. In the mid-1980s, the U.S. dollar exchange rate greatly increased, hindering exports and causing a decline in manufacture. In 1985, the United States signed the “Plaza Agreement” with Japan and other countries, forcing the Japanese yen and other currencies to greatly appreciate, surviving a crisis once again, while Japan paid the price of having several years of economic stagnation.
<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->China is not the Japan of 20 years ago. Only by putting China at ease can America maintain its international reputation — and only then can America gain China’s support on many issues. This type of support for the America of today is something the United States cannot do without. If Americans want to cheat China like they cheated Japan in the past, they will certainly lose the Chinese people’s trust, and cause U.S.-China relations to regress, resulting in both sides losing.<!--QuoteEnd--><!--QuoteEEnd-->