Comments on: Krugman on the end of trade http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Jesse http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/comment-page-1/#comment-7704 Thu, 08 Oct 2009 14:06:23 +0000 http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/#comment-7704 Quite a bit of that spike in trade can be put to IT advances and containerization.

But there is quite a bit more currency manipulation at the heart of it that is the 800 pound gorilla in the room of which few wish to speak.

Recall the 40% devaluation of the yuan in the mid 1990’s as China embarked on an aggressive policy of mercantilism.

They achieved most favored nation status the old fashioned way, most likely association with the Clinton – China political donations scandal which involved Mr. Gore. Not to be outdone, Mr. W Bush put the icing on the cake in his own term.

Keeping in mind that during all this, China has accumulated an enormous amount of dollars by maintaining an artificially low peg on the dollar, which as we all know is contrary to free trade 101.

And so the free markets were more than happy to export jobs and capital to China, and import cheap goods and fat profits for Wall Street, and create a trade bubble that was a tremendous boost for the credit bubble.

Paul Krugman knows this.

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By: Tim Worstall http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/comment-page-1/#comment-7698 Thu, 08 Oct 2009 10:03:14 +0000 http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/#comment-7698 “But the trade-related gains in global living standards that we’ve seen since the shipping container was invented might not be easily replicable going forwards.”

You mean that a technological revolution changes things and then, when it has changed things, stops changing things?

Fancy that!

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By: Dr. Strebel http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/comment-page-1/#comment-7696 Thu, 08 Oct 2009 08:52:43 +0000 http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/#comment-7696 Do you know why ZH gets so much more comments than you? They are inquiring minds with interesting, provocative and sometimes wrong thoughts.

And yes FU is right: Germany has a sick banking sector too. Commerzbank and Hype Real Estate have huge books of housing credits. The Landesbanken are almost bancrupt, because they bought CDO junk from US companies.

Perform your own investigations and put Krugman’s theses into question ;). By primitively bashing ZH you will make them more important and stronger. By ignoring them, they will grow anyway *harhar*.

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By: Fergus O'Rourke http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/comment-page-1/#comment-7694 Thu, 08 Oct 2009 07:12:44 +0000 http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/#comment-7694 To the extent that the “spike” in world trade was a function of an unsustainable consumption frenzy, it will be difficult to revive volumes quickly. But only to that extent, I suggest.

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By: Fu http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/comment-page-1/#comment-7693 Thu, 08 Oct 2009 07:04:28 +0000 http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/#comment-7693 Germany doesn’t have a sober banking sector.

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By: charles http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/comment-page-1/#comment-7692 Thu, 08 Oct 2009 06:57:08 +0000 http://blogs.reuters.com/felix-salmon/2009/10/07/krugman-on-the-end-of-trade/#comment-7692 ” “When I was in the government and someone said ‘that’s GATT illegal’, that was pretty much the end of the discussion.””
This is why Greenhouse Gases legislations are so important : they allow for “Gatt legal” protectionist measures. Once you strip Chinese producers of lax environmental standards and mispriced energy and increase the cost of transport, a lot of international trade disappears.

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