On Chinese Inflation

Econo-Girl noted Greenspan's remark that the Chinese peg to the dollar will result in inflationary pressures to their economy. True. The question is: what does that mean? The spector of inflation means something different to them than it does to us.

In the US, inflation means political suicide. So it is embraced like the Black Death. You know, the plague that killed 30% of Europe?

But what is the Chinese experience with inflation? Do they feel they have measures in place to restrain it? You can guarantee that their people feel smarter than ours, because everyone thinks they are smarter than everyone else. And when they succeed, it is due to brilliance. And when they fail, bad luck. The Chinese, being human, are the same. To them, it will be different because they feel smarter than us. Not the same because they are just like us. The Chinese have not had political reversals from bouts of inflation. That doesn't mean they won't. It just means they haven't yet.

Until then, don't project our terror into their eyes. We are really looking at ourselves, then. Not a way to win at poker.

The Chinese will not revalue their currency.


Anonymous said...

Thanks god we have you to tell the truth. Every business show on T.V. and on the radio keep spreading the lies that they will eventually give up.

Go, go econo-girl!

By the way, from what university did you get yout Phd in economics?

Econo-Girl said...

Econo-Girl does not wish to be affiliated with any institution, and is reasonably sure they don't want to be affiliated with her. I have an undergraduate degree in Economics, nothing further. That does not stop Econo-Girl in her mission of truth as plenty of PhD types are dead wrong and she might as well hold forth on her predictions.

The call Econo-Girl has made on the Chinese valuation issue is really a political analysis, not an economic one, as I'm sure you noticed.


The Lazy Iguana said...

But regardless, you are right. I think it is BETTER that you do not have a phd in economics like the other cone heads do. It allows you to hold on to some aspects of reality :)

The Chinese will do what they think is the best thing for them to do, without any regard to what the USA wants. They know we will not go to war with them, and can not embargo them.

Anonymous said...

No PhD? Cooool! I would have bet that it was from Harvard, Yale, or one of those Ivy League schools.

Lazy Iguana is right, now that I think about it: not being corrupted with the garbage that they teach you in graduate school keeps your mind objective.

Hey, are there any podcasting plans in the future?