Clueless in China

Mark Thoma pegs the China trip of Paulson and Bernanke.  I’m all for sending high level delegations to important countries, but I believe our "marketing" of this one has come off to the Chinese as a bizarre mix of pathetic begging and arrogant condescension.  I agree with Mark’s bottom line:

Given
the importance of Fed credibility, from my perspective an abundance of caution
is in order when the Fed chair speaks, and I would prefer that the Fed limit
itself to comments that relate directly to the conduct of U.S. monetary policy.

Comments

I agree. The concept that is a good idea for our Fed Chairman to be away
essentially talking down the dollar is troubling. He should be concentrating
on the Fed's charter of low inflaton (which we have in part thanks to China)
and fully employment.

Really? I thought the speech was basically about monetary policy and therefore perfectly appropriate, given that Bernanke is one of the most important central bankers in the world.

In his speech, he was basically saying:

1. Keeping large amounts of dollar is NOT the best investment
2. Pegging the yuan compromises the PBOC's ability to fight inflation

Are these points really so condescending?

Alphie says: What are the odds America will be competitive with China again in our lifetime?

What does "competitive" mean? Despite how politicians talk, there is no such metric for comparing countries known to economic science.

If it means "America is a cheaper place to makes shoes than China," the answer is almost certainly no. If it means "America has a comparative advantage over China in the production of some goods and services" the answer is undoubtedly yes.

I think it is completely within the Fed's purview to comment on this. The Fed would like to see a gradual decline in the value of the dollar rather than a dollar crash, otherwise inflation will spike.

If they can get the Chinese to continue the steady appreciation of the yuan, then mission accomplished. Paulson and Bernanke surely weren't expecting the Chinese to suddenly float the exchange rate.

Japan was China in the 70s and 80s.Japan remains in the second place
and will remain there well after China fail

>Japan was China in the 70s and 80s.Japan remains in
> the second place and will remain there well after China fail

This is the type of idiotic statement that only someone who *thinks* he is smart can make. I'm betting its a he.

What the fuck are you talking about?

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