Tweet
When Evans-Pritchard stays away from the histrionics, he can make some pretty good points. There's a tendency to bash unilaterally the profligate consumption of the UK and the US. This is sort of a flawed moralistic argument. More systemically, as Pritchard says it's "the deformed interplay of Asia's Confucian model and Western consumption." Excess savings are every bit as 'bad' as excess consumption, particularly when those patterns tend to manifest monolithically under one flag or currency. The deformities seem to really find their legs in the many currency manipulations e.g. China's reluctance to repatriate it export profits for fear of driving up its own currency.
Here's a another quote in the Pritchard article that seems to argue for the continued intermediate-term strength of the USD:
"Lombard's Charles Dumas says the "super-savers" (China, Japan, Germany) have warped their own economies by relying on exports and, therefore, on perpetual debt build-up by the West.
"Their currencies are due to decline against the dollar as weak US recovery throws a few scraps from its table, over which the world's exporters will have to scrabble, cutting their prices and currencies in the process. The US is not, and is not about to become, Argentina or Zimbabwe," he said."
http://www.telegraph.co.uk/finance/c...-US-bonds.html
Here's a another quote in the Pritchard article that seems to argue for the continued intermediate-term strength of the USD:
"Lombard's Charles Dumas says the "super-savers" (China, Japan, Germany) have warped their own economies by relying on exports and, therefore, on perpetual debt build-up by the West.
"Their currencies are due to decline against the dollar as weak US recovery throws a few scraps from its table, over which the world's exporters will have to scrabble, cutting their prices and currencies in the process. The US is not, and is not about to become, Argentina or Zimbabwe," he said."
http://www.telegraph.co.uk/finance/c...-US-bonds.html
Comment