intradaybill
Registered: Feb 2008
Posts: 2962 |
05-16-09 01:11 PM
Roubini:
"Having commodities priced in dollars has also meant that a fall in the dollar’s value doesn’t lead to a rise in the price of imports."
Really? Where has this guy been? During the recent commodity rally dollar exchange rate moved opposite to commodity prices. Gas prices skyrocketed in the US but they rose relatively less in Europe due to the rise in Euro.
This policy of a weak dollar is what mostly created this mess in the first place. The Chinese keep their exchange rate artificially low against the dollar for selling to the US and then they complain about the fall of the dollar. Very innapropriate.
HOW can anyone complain for an effect that it is caused by own action?
If the Chinese have left their exchange rate free they would not have the surplus they did, they would not have poured billions in the US from the money they received from US, interest rates in the US would have been higher and this whole crisis would have been restricted to an S&L type crisis of the 1980's and not to a worldwide crisis.
Now, if Roubini knows this but still likes to eat Chinese and don't say it I don't like that. If he doesn't understand this, I am not surprised, many talking heads understand nothing they speak about.
But it is more than hillarious to talk about a country that does not have basic human rights as a candidate for world reserve currency status.
Sooner of later all cranks make mistakes if they speak too much and they are exposed.
A historical perspective:
http://www.fao.org/DOCREP/006/Y4344E/y4344e04.htm
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