What the US Treasury had to say in the semi-annual Report to Congress on International Economic and Exchange Rate Policies
1. The Treasury had a few barbs
- "Russia is struggling due to economic mismanagement, lower oil prices, and the impact of economic sanctions."
- Ahem, Germany: "The adjustment process, both within the euro area and globally, would function much better if countries with large current account surpluses took strong action to boost investment and domestic demand.
2. Only good US economic numbers matter
"Second quarter growth confirmed a strong trajectory for the U.S. economy following a weak first quarter." the report says. Translation: Ignore +0.6% Q1 growth numbers because +3.9% is the real growth rate, nevermind that Q3 is tracking below 2%.
3. One thing they got right. This needs to be repeated as often as possible
"One reason for the lack of acceleration in global growth is that policy measures to support demand have been limited mostly to monetary accommodation, as fiscal policy has been either neutral or restrictive in many parts of the world," the report says.
4. China rhetoric toned down
"All told, the RMB has appreciated nearly 30 percent in real effective terms since June 2010." They toned down rhetoric that had previously called the yuan 'significantly undervalued' and changed it to "Our judgment is that the RMB remains below its appropriate medium-term valuation."
5. No manipulators
"Based on the analysis in this report, Treasury has concluded that no major trading partner of the United States met the standard of manipulating the rate of exchange between its currency and the United States dollar," the report says.
6. Chinese intervention
"China also appears to have intervened heavily in July ($50 billion), August ($136 billion), and September ($43 billion) to prevent RMB depreciation."
