Almost unnoticed (almost) China has been quietly making provisions to avoid the three-way-conversion from local currency to dollars to yuan when dealing with Central and South American trading partners. This should lift eyebrows in the United States, but so far it hasn’t. This might help:
China replaced the United States to become Brazil’s biggest trading partner, said Brazil’s Ministry of Development, Industry and Exterior Trade on Monday.
According to the trade balance released by the ministry, the sum of Brazil’s exports and imports with China reached 3.2 billion U.S. dollars in April, over the 2.8 billion dollars in its trade with the U.S.
Trade Minister Welber Barral said the change was “historic,” as the U.S. has been Brazil’s biggest trading partner since the 1930s.
Though the trade pacts are being sold as a way to unfreeze trade during the global economic slump, but the arrangements could well be the beginning of a larger effort by China engage in a little trade partner swapping. China already has put in place a $10 billion currency swap with Argentina, as well as deals with Malaysia, South Korea, Hong Kong, Belarus, Indonesia just in the last five months.
Is anyone paying attention over at Treasury?
China surpasses U.S. to become Brazil’s biggest trading partner [China View]
This is serious business. Really though…can we get Bush back already?
We Are The Ones We’ve Been Waiting For
These currency swaps are less than meets the eye. The yuan isn’t convertible an won’t be for a long time. I can assure you that when a crisis hits rich Argentinians and BraIlians want dollars. Yuan are relatively useless to them. This is just a way for China to lend people dollars but not lose an ass-ton of money (in yuan terms) when they inevitably have to stop manipulating the currency and let it appreciate. Of course they will lose an ass-ton on treasuries when that happens, but they married themselves to that position a long time ago.
@1
Bush didn’t know what a currency was.
@3
Absolutely.
Anyway, the Chinese has been dealing with countries like Brazil as those countries are sources of raw materials that the Chinese can use. As the US has declined its manufacturing base (or transferred it to China), the US has less use for those materials. This has been happening for years.
Does this mean more rainforest gets cut down and therefore already endangered pygmy marmosets could be extinct in a few years?
This is not good. Not good at all.
Me Chinese
Me play joke
Me put peepee
In your Coke
@7
you must have been the funniest kid in kindergarten. loser.
But EP, what about secured creditors?
@7 = loser, probably NYU grad
@6 Nice marmot…
-@6
yeah, and dont forget the tree skipping flowerfukker monkey and the blue winged assbiter moth. They too will be gone soon now.
5 – go back to reading the Slate Bushism of the day.
http://www.youtube.com/watch?v=jt5dY3vVoZ0
http://www.youtube.com/watch?v=eDJSVPAx8xc
Me thinks EP do not trust the chinese…
Oh relax, The Chinese had tea parties at least 1,000 years before Samual Adams was a gleam in daddy’s horny little eye.
@5:
Fail.
http://www.msnbc.msn.com/id/30229507/from/ET/
Fuckin’ fascists. Oh, wait …
I rest my case:
http://www.youtube.com/watch?v=8Ux3DKxxFoM
@16
On a balance of trade basis, the deficit in US exports of goods have increased 747% from 1992 to 2008.
@19, so? If you’re saying change in net exports, the US trade deficit was much smaller in 1992 than 2008, so sure. But that is the change in the difference between imports and exports. Not a figure representing any sort of total volume.
@20
On a monthly basis the exports of goods peaked in July of 2008. As of February of 2009 the volume has gone down 30% from the peak.
Now lets justify why trade deficits don’t matter. You can have a high export volume but if your import volume is much higher, then you have to borrow to pay for it. The Chinese are our lender to finance our purchases of Chinese goods and even more, according to Setser.
The economic debacle may even soften the trade deficit over the near term as the increase in the imports of goods slow down, but will the trade deficit start to grow again when (or if) the economy recovers?
I love the word “ass-ton.” Is there a rough definition of how much that is or is it like “grillion?”