Krugman: China monetary policy = AmerIsroili's
Mort Zuckerman
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Subject: Krugman: China monetary policy = AmerIsroili's
Date: Nov 16, 2009 2:59 AM
KRUGMAN ARTICLE BELOW
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WAY-elp, I'm gonna guess that whoever thunk up
this idea of disconnecting the dollar from the
gold/precious metals standard and then that we
should run a Surplus (Walmart) economy, further
wrecking the real value of the funny dollar -
which had the direct result of causing China to
play along and thus the trade discrepancy - further
exacerbated by the recent Oil Wars that we lost
(PNAC "Supremacy" Wars = Iraq, with Wolfowitz as
the "Viceroy," Baghdad as a World Bank/IMF major
branch and the Pipelines and Refineries that were
intended to run through Israel, too), might be a
way China is telling us that *we* need to deal with
the problems we created.
Conversely, and in continuum, while Americans butt
heads with foreign countries, the Chinese smile and
play along for the long term goal... Because we
Americans are smarter than everyone else! And think
up ideas like unhooking the dollar from a precious
metal standard, while militarily propping up oppressive
regimes like the Saud Family!! :)))
Allow me to think up a new term to describe the
latter: Military-Industrial-Complex!!
As I recall, one of our President Dicks sent
this character named Kissinger to "open up"
Chinese Slave Labor at the same time the
dollar was declared "Funny" in 1971.
Okay, now, 30-40 years later we think the Chinese
are being "bad and uncooperative," because the
Fiat-Dollar/Slave Labor/Oil Wars machinations
are not working out so well for us.
You can't run anything, especially economies,
with no energy. China does not have the energy.
They would *like* to have the energy, but *we* had
the 9/11 Show first.
The only thing Americans are Supremac-er at is
comedy.
The truth is that we are AmerIsroili; We are about
lies, stupidity, mass-murder and theft, but we're
not at at good at any of it.
Consider the human machine:
http://www.carlisle.army.mil/USAWC/parameters/97summer/peters.htm
"The complex human-machine interface developing in the US military
will be impossible to duplicate abroad because no other state will be
able to come from behind to equal the informational dexterity of our
officers and soldiers."
At least a third of ^^^ them are brain damaged
with bomb-shock and PTSD or some percentage
of both. Now the doctors are shooting the
soldiers at home, in their bases. Some soldiers
come home and start shooting up themselves and/
or their families.
So, that human-machine part didn't work out so
well, either, did it?
The truth is that we're losers, we're liars,
we're stupid, and we're brain-damaged, and we
can't think ourselves out of this mess (because
there is no solution to a physics problem when
one of the variables equals ZERO), but the best
the pundits can do is talk about bad, bad China,
who simply did what Heiney and Dick requested.
They're doing what Heiney and Dick requested,
and they know what the effects are this policy
are, as regards choking off the AmerIsroili
machine.
Kathleen M. Dickson
http://www.actionlyme.org
========================================
http://www.nytimes.com/2009/11/16/opinion/16krugman.html?_r=1&pagewanted=print
November 16, 2009
Op-Ed Columnist
World Out of Balance
By PAUL KRUGMAN
International travel by world leaders is mainly about making symbolic
gestures. Nobody expects President Obama to come back from China with
major new agreements, on economic policy or anything else.
But let’s hope that when the cameras aren’t rolling Mr. Obama and his
hosts engage in some frank talk about currency policy. For the problem
of international trade imbalances is about to get substantially worse.
And there’s a potentially ugly confrontation looming unless China
mends its ways.
Some background: Most of the world’s major currencies “float” against
one another. That is, their relative values move up or down depending
on market forces. That doesn’t necessarily mean that governments
pursue pure hands-off policies: countries sometimes limit capital
outflows when there’s a run on their currency (as Iceland did last
year) or take steps to discourage hot-money inflows when they fear
that speculators love their economies not wisely but too well (which
is what Brazil is doing right now). But these days most nations try to
keep the value of their currency in line with long-term economic
fundamentals.
China is the great exception. Despite huge trade surpluses and the
desire of many investors to buy into this fast-growing economy —
forces that should have strengthened the renminbi, China’s currency —
Chinese authorities have kept that currency persistently weak. They’ve
done this mainly by trading renminbi for dollars, which they have
accumulated in vast quantities.
And in recent months China has carried out what amounts to a beggar-
thy-neighbor devaluation, keeping the yuan-dollar exchange rate fixed
even as the dollar has fallen sharply against other major currencies.
This has given Chinese exporters a growing competitive advantage over
their rivals, especially producers in other developing countries.
What makes China’s currency policy especially problematic is the
depressed state of the world economy. Cheap money and fiscal stimulus
seem to have averted a second Great Depression. But policy makers
haven’t been able to generate enough spending, public or private, to
make progress against mass unemployment. And China’s weak-currency
policy exacerbates the problem, in effect siphoning much-needed demand
away from the rest of the world into the pockets of artificially
competitive Chinese exporters.
But why do I say that this problem is about to get much worse? Because
for the past year the true scale of the China problem has been masked
by temporary factors. Looking forward, we can expect to see both
China’s trade surplus and America’s trade deficit surge.
That, at any rate, is the argument made in a new paper by Richard
Baldwin and Daria Taglioni of the Graduate Institute, Geneva. As they
note, trade imbalances, both China’s surplus and America’s deficit,
have recently been much smaller than they were a few years ago. But,
they argue, “these global imbalance improvements are mostly illusory —
the transitory side effect of the greatest trade collapse the world
has ever seen.”
Indeed, the 2008-9 plunge in world trade was one for the record books.
What it mainly reflected was the fact that modern trade is dominated
by sales of durable manufactured goods — and in the face of severe
financial crisis and its attendant uncertainty, both consumers and
corporations postponed purchases of anything that wasn’t needed
immediately. How did this reduce the U.S. trade deficit? Imports of
goods like automobiles collapsed; so did some U.S. exports; but
because we came into the crisis importing much more than we exported,
the net effect was a smaller trade gap.
But with the financial crisis abating, this process is going into
reverse. Last week’s U.S. trade report showed a sharp increase in the
trade deficit between August and September. And there will be many
more reports along those lines.
So picture this: month after month of headlines juxtaposing soaring
U.S. trade deficits and Chinese trade surpluses with the suffering of
unemployed American workers. If I were the Chinese government, I’d be
really worried about that prospect.
Unfortunately, the Chinese don’t seem to get it: rather than face up
to the need to change their currency policy, they’ve taken to
lecturing the United States, telling us to raise interest rates and
curb fiscal deficits — that is, to make our unemployment problem even
worse.
And I’m not sure the Obama administration gets it, either. The
administration’s statements on Chinese currency policy seem pro forma,
lacking any sense of urgency.
That needs to change. I don’t begrudge Mr. Obama the banquets and the
photo ops; they’re part of his job. But behind the scenes he better be
warning the Chinese that they’re playing a dangerous game.
"[Real] scientists are *fiercely* independent. That's the good
news."-- NIH's Top Fool, Anthony Fauci