ZHANG MONAN A group of 130 lawmakers from the US sent a letter last Monday to the US Treasury calling on the Obama administration to pressure China on its exchange rate. Accusing the Chinese government of subsidising exports, they claimed that the "artificially undervalued" yuan is unfair to foreign competitors and puts China's exporters at an advantage. This laughable accusation exposes Washington's conspiracy to mislead people from the real currency manipulator that has caused turbulences in the global financial market: the US. To transfer the impacts of the global financial crisis to foreign countries, the administration has adopted a monetary policy that only aids its own economic recovery. When the global financial crisis began to careen at the start of last year, nearly every country turned to a "de-leveraging" financial policy to reduce financial risk. But the US, by taking advantage of the dollar's position as the world's leading currency, attracted a large amount of capital back into the US to balance its financial debt. As the crisis began to subside in early last March in China, the US opened its fluidity valve and embraced a monetary policy of quantitative easing. Consequently, its capital market experienced a robust rebound, which has prodded the US economy, especially its foreign trade, to recovery. However, as the world's largest economy began to climb out of its recession during last year's third quarter decision makers in the US believed it was time to halt the dollar's weak position. To make up for its steep fall in the previous months, the dollar has bounced back by 10 percent since last November. But the economic outlook in the USA's European allies is dire. Following the rebound of the dollar, Portugal, Italy, Greece, Spain and Iceland have suffered a worsening fiscal deficit and spreading debt crisis. The deteriorating financial scenarios in these European nations has caused a domino effect to other members and triggered a serious crisis of trust across the EU. But the US has always adopted an egotistical and unilateralist dollar policy. The currency has been considered an effective instrument to balance the USA's national interests and manage crises. A depreciated dollar has helped boost US exports and reduce its trade deficits against other countries. In October, a month in which the dollar devalued by a large margin, the US trade deficit declined by 7.6 percent from the previous month to $32.9 billion. This massive large trade deficit reduction has effectively helped imbalances in US current accounts and spurred its economic revival. However, the huge fiscal deficit and government debt still remain a bigger concern to Washington. As the largest US government debt holder, China's reduction in its holding of US Treasury bonds in the past three consecutive months has caused great concerns within the White House. Under these circumstances, Washington chose to appreciate the dollar in an attempt to reverse declining US debts, increase its attractiveness and mitigate growing concerns among its creditor about the safety of dollar-denominated assets. According to the US Treasury Department, the country is due to issue to foreign countries $478 billion of national debt in this year's first quarter and $745 billion in the first half of this year. Washington certainly needs a strong dollar to support its debt issuance plan. Given that the US national debt is calculated according to the dollar, a depreciating dollar would help reduce the volume of its real debt and sustain Washington's deficit-reliant financial policy. The US has actually chosen to depreciate the dollar as a main way to cut down its foreign debts since the end of World War II. Pressuring China to appreciate its currency and forcing the country into concessions on opening its financial market have served as part of the USA's monetary and financial campaign. The dollar, which has long been used by Washington as a forcible weapon to maximise its national interests and manage economic crises, still remains as the Sword of Damocles hanging over the global financial market. However, Washington's foolish dollar manipulations also serve as the best evidence of figuring out who is the world's largest currency manipulator and who should be levied by an anti-subsidy tariff. China Daily