want to bet india will now fall in line and take on china, thanks to the Great Economist and Leader we have?
interestingly enough, china's undervaluation does not affect india that much because we don't export that much. india's economy is highly domestically focused, and we can i suppose set up tariff barriers (although the hans will run moaning to the WTO -- incidentally india has filed the largest number of WTO complaints about the hans, which surprised me -- why, the comrades were not paying attention or what?) and non-tariff barriers (eg. all chinese imports have to be handled through the single customs point in hyderabad. ooops, what do you mean it's not a port so you can't ship your stuff there by sea? sorry, them's the breaks. and, oh, what do you mean you don't have labels for everything in every one of india's 18 national languages in addition to the 2 official languages english and hindi? sorry, you cannot sell stuff unless the labels are readable by all comrades in kerala and west bengal. please redo labels).
i just love non-tariff barriers. india's lovely bureaucrats would be just fantastic at thinking up the most mind-numbingly inane and impossible barriers -- such a natural for them!
anyway, nobody buys chinese dogshit in india because the quality is so darn poor.
---------- Forwarded message ----------
From: Girish
From: Girish
(Why should the US be alone in taking on China? What are the Europeans and Japanese afraid of?) On Sunday Wen Jiabao, the Chinese prime minister, declared — absurdly — that his nation's currency is not undervalued. (The Peterson Institute for International Economics estimates that the renminbi is undervalued by between 20 and 40 percent.) And Mr. Wen accused other nations of doing what China actually does, seeking to weaken their currencies "just for the purposes of increasing their own exports." |
7 comments:
Krugman is an idiot. He keeps contradicting himself.
Sorry, but I can't understand how "manipulating" currency creates problems. If it didn't "manipulate" its currency could China just not act to lower the prices of its exported products? I am not an economist so I do not understand these things fully but isn';t money just supposed to represent the value of goods and services. The real problem that the US has with china is that it does not have too much to offer China in return for what it buys from China. That's why the Americans are getting screwed and they can't stomach it.
Only thing worse and more dangerous than a regular economist is a noble prize winner economist.
NC. Curreny manipulation is fundamentally a more common form of disease called fiat money. In modern world, thanks to perverts like Keynes and crony capitalists/socialists like Manmohan Singh and Ben Bernanke, government issue DEBT notes which us mortals are expected to accept as money.
This ability to create money out of nothing (thanks to printing press) is cancer for any economy that contracts it.
And, yes....Inflation is NOT normal despite what the noble prize winner economists pray from their pulpits. Inflation is one of the most insidious form of organized and criminal transfer of wealth from people who save and produce to those who spend and consume.
sansk,
"Inflation is one of the most insidious form of organized and criminal transfer of wealth from people who save and produce to those who spend and consume."
Can you explain the above or point me to some articles. I am genuinely curious.
sk,
it is simple. The people who get to spend the newly printed money get the most value out of it because the this money is not in wide circulation yet. When this money is used to buy products/services, the cost of those things simply increase. By the time that extra print money is available to the people low in food chain, it has already lost its purchasing power.
The people who save money by keeping it in savings account in bank by definition loose the game in this scheme of things. Inflation forces a quick spending of money (call in carrying tax).
And why inflation is bad....look at how people in Zimbabwe are living. and yes, how dal has become out of reach of middle class in Delhi.
http://peekingintopresent.blogspot.com
Inflation as sansk said is not normal. In the US the Fed prints millions of dollars out of thin air which contributes to this.
The whole paper money is a sham anyway. The abandonment of the gold standard was a crime of the first magnitude.
People interested in these things can go read up the Austrian Economists among them Ludwid Von Mises, Murray Rothbard, Hans Hermann Hoppe (especially read his writings on the scam of Democracy). Most of their writings are available for free on lewrockwell.com & mises.org
It's a shame that most Indians don't know basic economics and repeat nonsense like "overpopulation" being the cause of Indian poverty.
Correction : In the US, the FED prints Billons of dollars out of thin air, which are further multiplied by another mandrake mechanism called Fractional Reserve Banking.
In summary, anyone paying an interest on a loan taken from a bank in such a system, is paying his hard earned money as interest on a principal which does not even exist until the loan is actually issued.
This is called Fraud in normal lingo, and is the single biggest reason why middle classes are unable to move up.
need to admit, i was partly in that class and used to think of Dr. Manmohan Singh as a respectable professional. Needless to say, I have grown up since then.
http://peekingintopresent.blogspot.com
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It's a shame that most Indians don't know basic economics and repeat nonsense like "overpopulation" being the cause of Indian poverty.
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