... that's the only thing I can think of every time I read
these kind of sentiments coming from the White House.
Nov. 20 (Bloomberg) -- President Barack Obama said countries running trade surpluses should boost domestic demand and allow their currencies to strengthen, repeating criticism he made of China a week ago at a meeting of global leaders.
“Countries with big surpluses have to figure out how they can expand demand,” Obama said today at briefing after a North Atlantic Treaty Organization summit in Lisbon. “Countries with significant deficits, we have to save more and focus not only on consumption, but also on production and exports.”
We've worshipped consumption and demonized production and now we're prostrate before our creditors, forced to print paper money to cover our debt payments. Obama and his buddies' sound like Wesley Mouch from Atlas Shrugged issuing
Directive 10-289.
"In the name of the general welfare," read Wesley Mouch, "to protect the people's security, to achieve full equality and total stability, it is decreed for the duration of the national emergency..."
Everyone around the world should stop trying to make money by producing valuable things at good prices because, well, we're losing. Oh yeah,
that's going to work out well. It's like the academics think that everyone else is out for "fairness" just like they are. They don't like the idea of competition and winners and losers, so they want to ban it. Instead, the Chinese and Germans are happily kicking our butts and will continue to do so.
The Obama Admnistration might be surprised to discover that the rest of the world isn't banning "touching" in their schools.
*Puts on his tinfoil hat*
ReplyDeleteI am honestly just waiting for the "State of Emergency" declaration which signals the end.
Hope everyone has their guns before then.
I can't really see his fascination with trying to "persuade" other countries to "let their currencies strengthen". If they are running trade surpluses, their currencies are going to strengthen regardless of what we do or don't tell them, or of what they try to do about it. They might be able to do some currency manipulation, but they're fighting against the tide, it's going to keep rising no matter how much they fight to build up the dikes.
ReplyDeleteSimilarly, the dollar is going to continue to weaken, which as far as I can see is long overdue. That's how trade flows self-adjust in a market economy, after all: exporters see their currencies strengthen until their stuff becomes as expensive as everyone else's, while importers see their currencies weaken until their stuff becomes cheap enough to compete. And all the political grandstanding in the world won't make any difference.
Incidentally, have you heard that China currently has an overall inflation rate of about 4.5%, but that their inflation rate for food has spiked to 10%? And food is one of the things that the US still exports. Imagine that.
One of the things that Mish Shedlock repeatedly points out is that governments can't control their currency. The amount of it out there is big and their ability to print or buy is relatively small. In this case, only a naive believer in the power of government would suggest that there was some king of simple means for controlling the output of a nation's population. Even if the Chinese started consuming more, that wouldn't have much of an effect on our competition with them. They'd still produce things people wanted at good prices.
ReplyDelete