Manipulate currency document easily

Aug 6th, 2022
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How to manipulate currency document

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Its been one of Trumps favorite accusations toward other nations. Currency manipulation. A currency manipulator. China is a currency manipulator. But how can banknotes like these, be manipulated? Lets break it down. One example of currency manipulation is what a country might do when it wants to minimize the effects of having a strong currency. Lets say for example, that one U.S. dollar is equal to ten dollars in the Republic of Monopoly and with ten Monopoly dollars, I can buy one cup of coffee from the United States. Now imagine that gradually inside the Republic of Monopoly, the economy starts doing very well and is extremely stable. The currency naturally could rise against all other currencies. So now that one U.S. dollar only earns you eight Monopoly dollars instead of ten. For me to buy that same cup of coffee from the United States, I only need to pay eight Monopoly dollars. So, its cheaper for me. So, this currency has become more valuable. My citizens have more spending

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Currency manipulation is a policy used by governments and central banks of some of Americas largest trading partners to artificially lower the value of their currency (in turn lowering the cost of their exports) to gain an unfair competitive advantage.
This act requires Treasury to analyze and report semiannually on the exchange rate policies of major U.S. trading partners. If countries are found to be manipulating their currencies, the act requires the Treasury Secretary, in some instances, to initiate negotiations to eliminate the unfair trade advantage.
In ance with the Omnibus Trade and Competitiveness Act of 1988, the Report concludes that no major U.S. trading partner during 2021 manipulated the rate of exchange between its currency and the U.S. dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage
Currency manipulation occurs when countries sell their own currencies in the foreign exchange markets, usually against dollars, to keep their exchange rates weak and the dollar strong. These countries thereby subsidize their exports and raise the price of their imports, sometimes by as much as 30-40%.
Exchange rates can be manipulated by buying or selling currencies on the foreign exchange market. To raise the value of the pound the Bank of England buys pounds, and to lower the value, it sells pounds. The Bank of England can influence exchange rates through its Exchange Equalisation Account (EEA).
A more direct form of currency manipulation is intervention. After the appreciation of the Swiss franc during the financial crisis, the Swiss National Bank purchased large sums of foreign currency, namely USD and euros, and sold the franc.
By buying foreign currency in the market, a country can artificially change the price of its imports and its exports. Countries do so to boost their own exports, especially if they otherwise have trouble generating the demand their economies need to grow.
China directly affects the U.S. dollar by loosely pegging the value of its currency, the renminbi, to the dollar. Chinas central bank uses a modified version of a traditional fixed exchange rate that differs from the floating exchange rate the United States and many other countries use.

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