Peter Schiff on Why Asian Countries Should Let Their Currencies Rise

Peter Schiff of Euro Pacific Capital have a good article about why China and other Asian countries (including Japan ) should let their currencies rise in value relative to the dollar.

While it is a bit misleading to say that Chinese workers receive no benefit from the current boom as real wages and real retail sales is increasing at an annual rate of about 10% and while he overlooks the short-term disruptions that more expensive currencies would mean, he still stresses the important point overlooked by Asian governments: that stronger currencies would reduce the cost of imports (including oil) and so help boost domestic purchasing power and domestic demand, something which would largely offset the weaker trade balances that stronger currencies would mean.

And it could be added the point which I have emphasized: namely that with the U.S. economy likely to weaken significantly (perhaps fall into a recession) and with the increasingly protectionist Democrats set to make big gains in this year's congressional election, they are likely to lose exports to America anyway, but with a stronger currency they would at least be to some extent compensated by reduced import costs.