"I don't think the Americans can justify calling China FX manipulators when they themselves have been manipulators of capital costs."
The Chinese hav ebeen manipulating the FX markets in a large scale and that is why they end up with more than a trillion in Treasuries. In order to keep their currency pegged to the dollar instead of letting it appreciate they printed Yuan, bought dollars and invested them in Treasuries.
Call it whatever you want, including manipulation of the capital costs. However under the situation what was required was negative interest rates. Yes NEGATIVE. The problem is that interest rates could not have gone bellow zero or else people would have replaced bonds with cash. Why negative? To kill people's preference for liquidity.
I have multiple times posted a reference to an elementary thing, which is required if one wants to understand real economic life, but to no avail. If you cannot understand the basics, I will be unable to help you in squashing your bias towers erroneous simplistic ideas. Manipulation here, manipulation there, manipulation everywhere. By the way, government intervention is not socialism. Socialism implies COLLECTIVE OWNERSHIP OF THE MEANS OF PRODUCTION.
