|Can Trump's narrative get worse? Oh yeah.|
Trump's top trade man, Peter Navarro decides to mouth off and accuse Germany of manipulating the value of the Euro for a trade advantage. As Trump might say, Real Smart!
Some figures: In 2013 dollars -- the most recent year we have statistics -- Germany exported around $810.4 billion to member states of the European Union, all of it in Euros. To the U.S. in the same year? $121 billion. (Hint: You can't manipulate a currency if you're all trading in the same currency.)
Yeah. The Germans are real currency manipulating bastards. Glad Navarro was sharp enough at math to catch them.
Read on in the Financial Times.
As Atrios would say, we are ruled by morons. Or creeps.
Update. Paul Krugman points out that
Germany in effect has an undervalued currency relative to what it would have without the euro Germany in effect has an undervalued currency relative to what it would have without the euro. The figure shows German prices (GDP deflator) relative to Spain (which I take to represent Southern Europe in general) since the euro was created. There was a large real depreciation during the euro’s good years, when Spain had massive capital inflows and an inflationary boom. This has only been partly reversed, despite an incredible depression in Spain. Why? Because wages are downward sticky, and Germany has refused to support the kind of monetary and fiscal stimulus that would raise overall euro area inflation, which remains stuck at far too low a level.
The euro itself is not undervalued against the dollar because the weak euro is determined by what investors think of relative investment opportunities.So the euro system has kept Germany undervalued, on a sustained basis, against its neighbors.