Sunday, November 7, 2010

Cui Tiankai for Treasury Secretary and Fed Chairman

A U.S. plan to limit current account surpluses and deficits to 4 per cent of gross domestic product is an absurd idea which ignores the fact that for very good reasons a country may have a surplus or deficit far in excess of this percentage--a  country whose citizens are very hard working, productive and have a penchant to save, for one may result in a huge trade surplus. There's nothing wrong with this. What's wrong is to institute a bizarre fixed limit. Talk about a global planned economy!

Where, oh where, will we ever be able to find government advisors who will understand this, and things like the dangerous, inflationary QE2? Perhaps in China.

Cui Tiankai, a deputy foreign minister and one of China’s lead negotiators at the G20, said on Friday:
We believe a discussion about a current account target misses the whole point. If you look at the global economy, there are many issues that merit more attention – for example, the question of quantitative easing.
He went on to say that limits on surpluses and deficits go back, “to the days of planned economies”.

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