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U.S. Treasury to Name-Shame Vietnam for Manipulating Its Dong

May 11, 2019

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By CCN: Writing for Bloomberg, Michelle Jamrisko and Nguyen Dieu Tu Uyen report Vietnam is at risk of being labeled a currency manipulator.

Vietnam is going to be labeled that – by whom? The U.S. federal government and socialist financial system? They’re the biggest currency manipulators of all.

Jamrisko and Nguyen write:

“Vietnam may be the latest country to be targeted by the U.S. as a currency manipulator in a twice-yearly Treasury report on foreign currencies expected this month. The Southeast Asian nation is coming under scrutiny for artificially holding down the value of the dong, people familiar with the matter said.”

Leave The Vietnamese Dong Out Of This

Devaluing the Dong to stimulate economic growth is no different than what the U.S. Federal Reserve has been doing with the Dollar since 1913. | Source: Shutterstock

The Bloomberg report says the U.S. bases its assessment of currency manipulation against the Vietnamese government on three things:

“…a current-account surplus of more than 3% of gross domestic product; a bilateral goods trade surplus with the U.S. of at least $20 billion; and intervention in the foreign-exchange market that exceeds at least 2% of GDP…”

But after revising the current-account surplus figure to 2% this year, more countries will fall under the meddling scrutiny and oppressive gaze of the evil eye of Sauron.

One way to think of the current-account surplus is the difference between a country’s exports and imports. Vietnam’s is currently 3% of GDP. That makes seven years of trade surplus out of the last eight.

The Trumponomics on Vietnam Makes No Sense

The Bloomberg piece says Vietnam’s financial authorities have devalued the Dong in the past to drive exports and stir the economy. Yeah, like the U.S. financial system has never done that before.

Trumponomics, a uniquely despicable and foul-smelling zombie of defunct 16th-century mercantilism, sees this as some kind of win for Vietnam and a loss for America.

This is not very clear economic thinking. The Vietnamese “trade surplus” and the U.S. “trade deficit” is one side of the coin. The other side of the coin is a Vietnamese capital deficit and a U.S. trade surplus.

The end result that these socialist central planning bureaucrats measure and call a trade surplus is ultimately just the sum of a great number (Americans and Vietnamese traded $62 billion worth of goods and services last year) of decisions, made by individuals, with their own money.

Americans sent more money to Vietnam last year, but Vietnam sent more goods and services to America. It’s all cool.

Why should that land Vietnam on a watchlist for how it runs its currency? Can Vietnam make its people buy more imports, or make less stuff that Americans want to buy?

Maybe Vietnamese are just getting really good at making things. And maybe Americans are just really good at spending money. That’s our business. We don’t need no stinking politicians or bureaucrats on this.