Beneath the usual diplomatic niceties, there is likely to be some real friction as U.S. Treasury Secretary Timothy Geithner meets top Chinese officials in Beijing early next week. Premier Wen Jiabao and vice premier Wang Qishan are worried that Washington’s profligate spending policies will lead to inflation and dilute the value of China’s more than $1 trillion in U.S. assets—a concern they will certainly bring up. Beijing too is increasingly pushing for a larger international role for its currency the renminbi, which would by necessity weaken the leading global role the U.S. dollar now plays. In March central bank governor Zhou Xiaochuan called for a new “super-sovereign reserve currency” to replace the dollar. That was followed by a series of currency swap agreements signed between China and some of its trading partners including Malaysia, South Korea and Argentina.All of this is old hat. It is funny to read the same story over and over, as if it is new every time. Why do these guys have these meetings? Everyone knows his own and everybody else's position and agenda. This isn't poker. On top of that, nothing has changed in 20 years. It is equally obvious what everyone is going to do: exactly what is in his own interest, everything else be damned. The "non-aggregate Chinese individuals responsible for Chinese economic policy," e.g., the Chinese knew this just as well as the "non-aggregate American politicians and FED chairmen," e.g. the Americans back when they decided to consumate this sick economic relationship. This is the perfectly predictable outcome of mercantilism coupled with debt fueled consumption. They knew the day of reckoning would come, and what their own actions and the actions of their counterparts would be when the time came. All of this has been set in stone for quite some time. There really is nothing to discuss. This is one of those stories that simply tells us what we already know and is not worth reading. Assuming we are economically literate. Why did I post on it? I don't know...
Friday, May 29, 2009
More Old News
Blogging has been slow lately. Just haven't been feeling it. I've been busy, too, but not that busy. There has been a lot of good reading over at Eternity Road. But then, there always is. Today's post by Fran, which is excellent as usual, has me slightly regretting the wording of my post from a few days back. *Sigh*. Whenever one begins to talk or write about other nations, whether politics or economics or what-have-you, one runs into this sort of sticky thought-goo, which usually turns out to be verbal-goo more than anything, at least in my experience. Honest listeners generally know what you are talking about and what you mean, apart from whatever word choice one happens to end up using, however poor. I certainly would not subscribe to the belief that all members of a group are the same. At the same time, one would be completely dishonest to say that there weren't any such thing as trends within groups. And certainly, each person deserves an individual "hearing," and ought not be tried and sentenced purely as a member of a group. But likewise, we must deal with statistical aggregates as a practical matter, especially when it comes to things like national policy, whether economic or political. Every state, let alone every American, cannot have his own individual foreign policy, and most economic forces, like supply and demand, are the net result of mass-action. They are perfectly valid characterizations, outliers or not. Keeping our heads about ourselves as we make the leap from characterizations of individuals to characterizations of statistical aggregates can be demanding. On the other hand, I find it a little absurd that one must begin any piece which addresses another group with a legal disclaimer recognizing individual variability. The idea of individualism is supposed to be axiomatic to us as Americans. Most people get this, except for a whiny few who are always looking for something that will give them an excuse to take offense. (Incidentally, having married a Chinese wife and living day to day amongst a great number of various Latin Americans, I find that it is Americans who are the hypersensitive ones on this topic. Most other folks seem perfectly comfortable with generalizing statements, and understand perfectly clearly that there are exceptions. Maybe we should take a lesson from them and lighten up.) So, I think I will continue to be verbally lazy as a matter of principal. Clearly, when referring to "Japan" or "the Chinese" or other such with respect to economic policy or mass-action, I am referring either directly to the folks in charge of said policy or responsible for said action, or to the statistical aggregate, not making sweeping generalizations about every single individual of said nationality. And since I've heard that it is considered a blogging faux pas to alter or remove a post once it has been posted for such reasons, I shall leave the previous post as it stands, and leave this topic once and for all. Hopefully. Probably not. And speaking of statistical aggregates, we have a story today about our own Timothy Geithner preparing for a trip to China: