The U.S. Treasury Department announced Monday that China is no longer on a list of countries deemed to be “currency manipulators.” The timing was awfully convenient, coming just ahead of an expected Phase One trade deal between the two powers.
Nobody actually believes China has stopped manipulating the value of its yuan versus the U.S. dollar.
But the Trump administration is apparently willing to accept a certain degree of currency rigging in exchange for other concessions on trade.
It’s not as if the U.S. government has a stellar record when it comes to heeding principles of free and fair currency markets. It (through the Exchange Stabilization Fund and other vehicles) is constantly trying to manage the value of the dollar versus the currencies of trading partners, too.
It’s not as if equity markets, interest rate markets, and precious metals futures markets are free from manipulation, either. Price rigging schemes of various sorts – ranging from small-scale “spoofing” to large-scale suppression – occur practically around the clock.
Occasionally, there are prosecutions.
Last year, for example, the U.S. Department of Justice criminally charged several JPMorgan traders for fraud and racketeering in a conspiracy to rig precious metals markets.
Yet previous criminal investigations by federal regulators have often gone nowhere, with evidence of manipulation inexplicably disregarded.
Congressman Alex Mooney from West Virginia has asked Attorney General Bill Barr to look into price rigging, particularly within the silver market which is regularly subjected to artificial volatility induced by large institutional traders (i.e., bullion banks) with outsized positions.
The manipulation may be occurring on an even larger scale if the Federal Reserve or the U.S. government or its agents are involved. It is widely suspected but difficult to prove since the Fed operates in secret and the government isn’t keen on investigating itself.