Seems like everyone is ganging up on China to revalue its currency (or to do something) before Paulson's visit in a few weeks. Check out Sarkozy! Boy, this must be a mutual love-fest between Bush, Merkel, Sarkozy, (and Blair) these days.... It all hinges on the Chinese. Their answer this december will likely decide the economics of the next three years. And I have absolutely no idea what they are going to do. For that matter, I don't think anyone else does either - although I think that they are showing some signs of being willing to play along. Do we inflate or do we deflate? It is Hu Jintao's decision how much pain he is willing to suffer & how closely he can hold onto power if he chooses to test the US and Europe at this time. If those chinese spies are combing ET like the rest of the net I hope they consider one thing closely - just remember the hubris of the "Japan that could say no" and their decade long deflation after the real estate debacle and the nikkei crash. Is this now the "China that can say no?" http://biz.yahoo.com/ap/071125/china_france.html?.v=1
Check this out from bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=adDSm7aGbHrU&refer=home Well, if that isn't a veiled threat, I don't know what is. As of August chinese income per capita is only at $1,740(08/18/06) as per chinese embassy web site. Still short of the magic $6000 -$9000 number needed for political stability. Is this a "slow down or else" statement?
Here's a fun snip from the opening remarks at Paulson's current china summit: http://www.fmprc.gov.cn/eng/zxxx/t389102.htm In other words: we want your high technology. Note GDP growth target and my previous posts. 4 x = ?
Apparently when the chinese invented paper and gunpowder, the white man was living in caves and scavenging for potatoes