|
"When America sneezes, the world catches cold." So they used to say. What happens when we get pneumonia?
China may be catching a cold.
Chinese stocks plummeted 8.1 percent on Tuesday, their biggest
single-day drop in nearly 16 months, leading a broad downturn in Asian
stock markets. ...
The plunge in the Shanghai and Shenzhen markets followed an
increase in Chinese bank reserve requirements, increased worries about
high food and oil prices, and fears about exports to the United States.
Its just one day. So we'll see. But the economic context
is horrible. No country can maintain an $700-800 billion trade
surplus with another country. U.S. consumers cannot supply the
money for this. We've used up our savings, and now used up our
debt. The age of using trade to transfer our money elsewhere is
over.
High energy prices are obviously a huge problem that
absolutely must be addressed worldwide... whether through conservation,
alternative energy forms or something else.
China has lived off of protectionist and mercantilist policies aimed
at sucking the most economic blood out of the United States. We
now need a blood transfusion, but there is none to be found.
Will their currency misalignment policies, subsidies and taxation on
imports be enough to keep them going? Maybe it is time for
another Bretton Woods conference to pursue balanced world trade.
Not free trade. Pursue balance.
Trackback(0)
 |
TrackBack URI for this entry
Subscribe to this comment's feed