Stephen Roach was interviewed on Bloomberg TV about Krugman’s currency manipulation stance. Roach does a fact-less diatribe disagreeing with Krugman, saying:
I think we should take out the baseball bat on Paul Krugman. I think the advice is completely wrong. The US has had a conscious policy here of maintaining, quote, a strong and stable dollar. China is saying basically the same thing in terms of its stable currency. Isn’t it the height of hypocrisy for America to articulate to articulate a particular position in its currency but the Chinese are not allowed to do that, especially since they as a developing economy – with an embryonic financial system – need a currency anchor probably a lot more than a sophisticated, quote unquote, economies like the United States."
Roach is apparently against free trade. He wants some countries to rig the rules in their favor and against the U.S. He never mentions the great recession.
Oh… and Roach is chairman of Morgan Stanley’s Asian operations. He is doing financial stuff in the fastest growing economy in the world. And if we interfere with the currency gig, Roach is no longer doing financial stuff in the fastest growing economy in the world. And that would be bad for his bonuses.
Do these people have any credibility?
The Chinese government (in one guise or another) is most likely a client of Morgan Stanley. Roach is their spokesperson.
It’s almost a complete waste of time to even comment on anything Steven Roach has to say about China – he should be disclosing what he does for a living – sell things to the Chinese. His bias is profound – he’s been consistently the biggest Chinese apologist in the world. Anyone who does business with his firm – you corporates should be listening – should cite this b.s. and pull their business – because that’s what this is all about – just business.
oh, and no, they don’t have credibility to those of us on the inside, but we’re not his target market – it’s the rest of this country who doesn’t get it. Seriously, anyone who doesn’t like this stuff from him should hit Morgan Stanley where it counts! I am not in the business, not looking for revenue – just having been on the inside I know how it works. If enough non-Chinese customers of Morgan Stanley – and I am NOT talking about retail – I am talking about corporations who do meaningful fee-generating business with them – then Roach will be singing his tune in much quieter – and proably higher – voice.
To use Mr. Roach’s vernacular–the only person a baseball bat needs to be takn to is Mr. Roach!!!! Mr. Krugman be our guest!!!!
Like the Chinese leadership, Roach needs a remdial course in the international monetary system. The agreed international objective is [i][/i]not stable exchange rates; rather it is stable and equitable growth in the world economy. That’s the essence of IMF Article 4 which obligates all member countries, China included, to allow its exchange rate to move as necessary to prevent the adjustment of imbalances in trade and payments (money) flows. It’s the imbalances, not exchange rate fluctuations, that cause problems. When China has a huge current account surplus and the highest level of foreign exchange reserves in history and the US is running a protracted current account deficit, the RMB is supposed to rise and the dollar fall. This misplaced emphasis on the virtue of a stable exchange rate is patently false. No educated economist would make unless he’s currying favor with the offending party.[i][/i]