US still playing the currency card

You can bet that as the presidential election in the United States draws near, the opposing candidates will both be claiming to have a better understanding of what needs to be done to boost the country's economic recovery and create jobs. Yet clearly neither has a plan. Instead, we keep hearing the accusation that China is stealing American jobs by deliberately manipulating its currency to enhance the competitiveness of Chinese exports.

Of course, this tired old lie keeps being batted about because US politicians find it a convenient way to cover up the real causes of the US' malaise. But as the election draws closer, this lie will be accompanied by calls for action to force a revaluation of the Chinese currency.

The US is particularly fond of playing the currency card because its trade policy is, in certain ways, influenced by the 1985 Plaza Accord, which was widely believed to have neutralized the Japanese trade threat by forcing a massive appreciation of the yen against the US dollar.