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© 2020 Relevant Protocols Inc.
A focused study group for the discussion of economics and economic policy.
26664 Members
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We'll be adding more communities soon!
© 2020 Relevant Protocols Inc.
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Wholesale prices are rising in China. And with China's currency strong this spring, the price increases could add to inflation pressures elsewhere, including the United States.
Wholesale prices are rising in China. And with China's currency strong this spring, the price increases could add to inflation pressures elsewhere, including the United States.
Prices are jumping around the world, prompting growing warnings that a wave of inflation could threaten the global economy if it persists. China isn’t waiting to find out. China has been trying to become the world currency since 2014. When the imf released its reports on baskets of global currency.
Prices are jumping around the world, prompting growing warnings that a wave of inflation could threaten the global economy if it persists. China isn’t waiting to find out. China has been trying to become the world currency since 2014. When the imf released its reports on baskets of global currency.
I used to think that about China but now I'm not so sure. There is obviously much benefit to being the global reserve currency such as seniorage, but there are issues too; as the US is finding out again in part due to the Triffen dillema. China would have to open up its markets much more in order to satisfy demand if they were global reserve and shift from net exporters to importers. It's not inconceivable but I am starting to think they might prefer better international rails and a bigger regional presence than global reserve.
I used to think that about China but now I'm not so sure. There is obviously much benefit to being the global reserve currency such as seniorage, but there are issues too; as the US is finding out again in part due to the Triffen dillema. China would have to open up its markets much more in order to satisfy demand if they were global reserve and shift from net exporters to importers. It's not inconceivable but I am starting to think they might prefer better international rails and a bigger regional presence than global reserve.
All these issues concerning China's tightening, crack downs etc. One word, Containment. China feels like there's a containment policy from the US and they needed to act. From percentage of voting right in World institutions to America's pivot to Asia(a military pivot ) and trades. Whether China's containment policy is real or not but the perception is there and sometimes that's all that matters. Chinese economy can't do good when the rest of the world for whom China produces everything is in a recession... Also China can't use the same methods of infrastructure building to avoid economic hardship that they did in 2008 because they've already build up everything that they can in China and most of it is practically empty and non-performing. If they try to build outside of China they should be sure that they will not see any of that money back as has been the case with most of their projects, but they can still get some good assets in those countries. So basically economic hardship is unavoidable.
All these issues concerning China's tightening, crack downs etc. One word, Containment. China feels like there's a containment policy from the US and they needed to act. From percentage of voting right in World institutions to America's pivot to Asia(a military pivot ) and trades. Whether China's containment policy is real or not but the perception is there and sometimes that's all that matters. Chinese economy can't do good when the rest of the world for whom China produces everything is in a recession... Also China can't use the same methods of infrastructure building to avoid economic hardship that they did in 2008 because they've already build up everything that they can in China and most of it is practically empty and non-performing. If they try to build outside of China they should be sure that they will not see any of that money back as has been the case with most of their projects, but they can still get some good assets in those countries. So basically economic hardship is unavoidable.
>"Rising costs at its factories — an accelerating trend, new data showed — could trickle into the rest of the world economy."
>"Rising costs at its factories — an accelerating trend, new data showed — could trickle into the rest of the world economy."
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