George Soros on China's currency policy...

China must fix the global currency crisis

This is pretty depressing. One of the things Soros is saying is that the Chinese practice of offsetting their trade surplus by selling yuan/buying dollars essentially transfers the fruits of the Chinese people's labor into the pockets of the Chinese gov't ("it has the same effect as taxation but it works much better"), which then allows the government (not the people) to decide what to do with the surplus (which has been converted into us dollar reserves). This would be bad enough if it weren't for the fact that other countries must now follow suit (mostly because of the Fed's quantitative easing and China's insistence on maintaining their weak currency). It's happening as we speak at the IMF. Several countries have already announced capital controls. The fruits of people's hard work all over the world are being sucked up into gov't coffers and converted into US dollar reserves as part of a lose-lose game that nobody is willing to give way on. Geithner blames China, China blames Bernanke, and everyone else scrambles to weaken their currencies at the expense of their own workers, who could be spending their surplus on goods and services (like education) that would improve their own lives. The upshot here is that Chinese currency policy isn't really about enhancing the Chinese economy. It's about maximizing the Chinese gov't's control over its people. And now that same policy is being exported to other emerging economies who have no choice but to artificially weaken their own currencies at the expense of their population's autonomy.