Tuesday, January 18, 2011

China Adopts Nixonian Economic Policy

By golly, I think Paul Krugman nails this one:
...the Chinese government refuses to contemplate a currency appreciation, in part because of the political power of exporters, in part because it now views defying US demands as a way of upholding national pride, in part because, I believe, there’s a lack of clear macroeconomic thinking in high places. Instead, China has been trying to keep a lid on inflation by limiting credit — not too successfully — and by imposing price controls.

So, when was the last time the US government tried to pursue an excessively expansionary macroeconomic policy, while using price controls to suppress inflation? During the Nixon years.

Yep: what we’re seeing right now is a case of China goes to Nixon. And it won’t end well.

5 comments:

  1. But Paulie baby, if they've got economic slack and excess capacity, all that money printing is sure to get the ball rolling again!

    That's how it works in the good ol' US of A, ain't it?

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  2. Robert, your comments convinced me to sell all my Chinese etfs expecting a bubble to pop. Now I hope you are right and Peter Schiff is not. Otherwise I'll send you my dogs. :)

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  3. Retarded and violent government psychopaths.

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  4. >Yep: what we’re seeing right now is a case of China goes to Nixon. And it won’t end well.

    That's because Nixon was a Republican.

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  5. Nixon was a power-hungry psychopath similar to that little freak Arnold Schwarzenager...And Jerry Brown. Voters are parasites.

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