Early September skirmishes turned this week into full-scale “currency wars”, to use Brazil’s terminology. Dramatic language, but not unwarranted. The markets have taken Fed signals of preparation for further money printing as an effective attempt at a dollar devaluation, allowing the country export its deflationary pressures overseas via capital outflows to higher-yielding developing countries.
From the econ blogosphere:
– The libertarian Adam Smith Institute says here that the UK government should look at every government job, programme and department, and ask whether they are really needed. “Do we really need new school buildings….? Should taxpayers really stump up for free bus passes, or winter fuel and Chistmas bonuses for wealthy pensioners?”
Reuters’s top news and innovation teams have put together a web site on the yuan and the debate over its revaluation. Particularly worth a look after the weekend’s statement by China that it would allow more flexibility in its currency exchange. You can access it here, but it looks like this:
Michael Pettis, a professor and China expert at the Carnegie Endowment for International Peace, has put together a thorough and informative look at all things U.S.-China trade. It’s well worth reading and watching the entire thing, but here’s a few highlights that jump out: