A decoder ring for mumbo-jumbo about the Fed

Something critically important and telling happened in last night’s GOP debate, something that probably flew beneath the radar of most of those watching. It came in response to a question from a Tea Party member regarding the Federal Reserve.

Rick Santorum took the question first, telling the Tea Party crowd that “what we should do with the Fed is to make it a single charter instead of a dual charter.”

“They should be a sound-money Federal Reserve. That should be their single charter, and that is it.”

Herman Cain, Michele Bachmann, Rick Perry and Mitt Romney jumped in to agree, arguing that the primary and in most cases sole responsibility of the Federal Reserve is to protect the dollar.

So what was all that about? Hidden in that seemingly technical, arcane discussion is an issue of profound importance. A lot of Tea Party activists heard the message, but a lot of other Americans probably did not.

Since 1977, the Federal Reserve Board has had a dual mission. It is supposed to protect the integrity of the dollar by fighting inflation, and it is supposed to try to maximize economic output and employment. Put simply, its job is to keep inflation as low as possible to protect the value of accumulated wealth, and also to keep unemployment as low as possible to keep people working.

Modern conservative economic theory completely rejects that second role, to the degree that Perry has even accused Fed Chairman Ben Bernanke of committing treason because he has dared to try to stimulate growth and jobs, as he is required to do by law. In Perry’s mind, Bernanke — a longtime Republican — was guilty of trying to boost the economy and thus boost Barack Obama’s chances of re-election.

This seemingly technical discussion, in other words, says an awful lot about GOP economic priorities. Set aside the fact that a weak dollar is sometimes good for the economy, because what we’re talking about here is less a debate about economic policy than a question of values and priorities.

If you were paying attention, what you heard last night is the expression of GOP doctrine that the interests of capital must be protected at all costs, and the interests of working people are of lesser importance and don’t deserve equal consideration.

(Meanwhile, to fend off inevitable claims that Bernanke and Obama are in the midst of defiling the holy dollar, the chart below documents the status of the dollar against the euro (in red) and the Canadian dollar (in blue) over the last eight years. As it demonstrates, the dollar today is about where it was for much of 2007 and 2008, after years of gradual decline under previous management.)

dollar

– Jay Bookman

383 comments Add your comment

Bosch

September 13th, 2011
4:35 pm

I hate that I’m so math stupid….

Brosephus

September 13th, 2011
4:35 pm

Damn Jay. Maybe I should have watched the debate instead of football. I’m gonna have to go find some video for this one…

Bosch

September 13th, 2011
4:35 pm

FIRST!!! Yehaw!!

Bosch

September 13th, 2011
4:36 pm

“Herman Cain, Michele Bachmann, Rick Perry and Mitt Romney jumped in to agree, arguing that the primary and in most cases sole responsibility of the Federal Reserve is to protect the dollar.

So what was all that about? Hidden in that seemingly technical, arcane discussion is an issue of profound importance. A lot of Tea Party activists heard the message, but a lot of other Americans probably did not.”

And to be honest, those folks probably didn’t know what the hell they were agreeing too.

Brosephus

September 13th, 2011
4:37 pm

Bosch

You might have been first, but according to your own post, you’re stupid. :razz:

Bosch

September 13th, 2011
4:38 pm

Brosephus!

First and stupid!! Yeap, that’s me! :)

Brosephus

September 13th, 2011
4:38 pm

josef

September 13th, 2011
4:39 pm

The only thing I know about the Fed is that it’s creator turned his back on it, but did say it was good revenge for the Removals if nothing else…

Jay

September 13th, 2011
4:39 pm

He’s math-challenged, so maybe he just THINKS he was first.

Steve - B.

September 13th, 2011
4:40 pm

“In Perry’s mind, Bernanke — a longtime Republican — was guilty of trying to boost the economy and thus boost Barack Obama’s chances of re-election.”

I think the re-election part is in Jay’s mind.

Generation$crewed

September 13th, 2011
4:40 pm

Bosch

September 13th, 2011
4:38 pm

Dad used to always tell us if you are gonna do something be the best at it, or work harder at it than everyone else.

You sir have made my father proud! :)

Redneck Convert (R--and proud of it)

September 13th, 2011
4:40 pm

Well, sounds to me like this Federal Reserve is trying to make Social Policy. And that’s the job of Congress. Besides, we don’t want any, especially if it’s going to be handouts to a bunch of jobless bums, illegals, and Those People.

So maybe we shouldn’t execute this Bernanke but he sure deserves a rap on the knuckles. Besides, if he keeps going he might could lower unemployment and get this Obama reelected. We sure as heck don’t want that.

That’s my opinion and it’s very true. I don’t know all the details and it’s for sure I don’t understand that graph. Just make sure the price of Skoal and Red Man don’t go up and I’ll be happy.

Doggone/GA

September 13th, 2011
4:41 pm

“I hate that I’m so math stupid….”

This one doesn’t take math skills. The blue like is the dollar. Look at where is was immediately above the “2008″ then look at where it is immediately above the “2011″ Within the band, they’re pretty much the same.

josef

September 13th, 2011
4:41 pm

JAY

Were your ears burning today? :-)

Bosch

September 13th, 2011
4:42 pm

Jay and GS,

:lol:

I’ve always thought it was important to at least try to be your best.

Bosch

September 13th, 2011
4:43 pm

Doggone,

Yeah, and I don’t know what that means either. I’m math AND finance stupid.

:(

Jay

September 13th, 2011
4:44 pm

Then you would be wrong, Steve B.

From a transcript of last night’s debate:

PERRY: I — I said that, if you are allowing the Federal Reserve to be used for political purposes, that it would be almost treasonous. I think that is a very clear statement of fact.

I am not a fan of the current chairman allowing that Federal Reserve to be used to cover up bad fiscal policy by this administration. And that, I will suggest to you, is what we have seen.

Jay

September 13th, 2011
4:45 pm

Not any more than usual, Josef.

Doggone/GA

September 13th, 2011
4:46 pm

“Yeah, and I don’t know what that means either. I’m math AND finance stupid”

Sure you do, just read straight across and ignore the ups and downs. The bottom line is that, regardless of all the movement in between…the dollar is pretty much at the same value now as it was 3-4 years ago.

Steve - B.

September 13th, 2011
4:46 pm

Jay – I throw myself on the sword and admit I am 100%. My apologies.

Test

September 13th, 2011
4:47 pm

Surprise! Surprise! Surprise!

GOP is allergic to job creation!

Not no way….Not no how.

Who’d a thunk it?

Steve - B.

September 13th, 2011
4:47 pm

Jay

September 13th, 2011
4:47 pm

Oh wait. I may know who you mean.

The new mother of twins?

A Retirement in Time saved Mine

September 13th, 2011
4:48 pm

I like cheap dollar. They’re more affordable. I can buy in bulk. :grin:

Steve - B.

September 13th, 2011
4:48 pm

Jeez….I meant to say 100% wrong. I even screwed up my apology. :)

godless heathen

September 13th, 2011
4:49 pm

This is over my head so I will comment on the real news of the day: Dekalb decides to not ban smoking in strip clubs!! Freedom is not totally dead, yet!

md

September 13th, 2011
4:49 pm

“If you were paying attention, what you heard last night is the expression of GOP doctrine that the interests of capital must be protected at all costs, and the interests of working people are of lesser importance and don’t deserve equal consideration. ”

not too sure those aren’t one and the same………..don’t protect the capital, and it won’t matter much about anything else……………….

Bosch

September 13th, 2011
4:50 pm

Thanks Doggone, did you see how the blue line went down, down, down, from 2004-2007? But that isn’t necessarily a bad thing like what Jay said, right?

I learn fast.

Bosch

September 13th, 2011
4:51 pm

godless heathen and I can just sit against the wall and throw spit balls at y’all — whadda ya’ say godless? You game?

Doggone/GA

September 13th, 2011
4:52 pm

“don’t protect the capital, and it won’t matter much about anything else”

and capital is useless without the labor to make it worth something.

Jay

September 13th, 2011
4:52 pm

The reverse is also true, md

Doggone/GA

September 13th, 2011
4:53 pm

Bosch – check this out: http://www.npr.org/2011/08/14/139611423/weak-dollar-benefits-some-u-s-manufacturers

They explain it much better than I can. I understand it, I’m just not good at explaining it!

Bosch

September 13th, 2011
4:54 pm

“and capital is useless without the labor to make it worth something”

I know what THAT means! I told y’all I was fast. But I knew that before.

godless heathen

September 13th, 2011
4:54 pm

I’m with you Bosch. Or we can just go to Teasers and smoke.

Bosch

September 13th, 2011
4:55 pm

“I understand it, I’m just not good at explaining it”

It’s like offsides in soccer — most people know it when they see it, but can’t explain it.

Will start reading now…

Steve - B.

September 13th, 2011
4:55 pm

Couldn’t you also say it went down from -6 to -30 in the last two years?

Trotsky Radio (Left Wing Mgmt)

September 13th, 2011
4:56 pm

If I can play a little Irving Kristol here, what we have here is the cynical split between Republican policy and the rhetoric that is used to sell it to a gullible public.

As Kristol himself might have said, it’s useful for political purposes to present the issue as a matter of the “strength” of the dollar, because naturally, what self-respecting patriot or fine upstanding American citizen is going to want anything but a strong dollar.

I wonder by the way how many people in that audience last night who cheered at the idea of the “single mandate” could benefit from a weaker dollar, e.g. through a devaluation of their debt load, just to name one way.

As Kristol might have said, echoing his mentor Leo Strauss: democracy is a fundamentally non-viable system insofar as leaders really try to convey the full scope of truth to them, which they are ill prepared to grasp. Better instead to feed them “noble lies” like the one that claims that a strong dollar is always and automatically best for the nation. (Right wingers like Strauss and Kristol think it’s better for public order that people identity wholly with the concept of nation, though they would be better off identifying with their own interests more.)

md

September 13th, 2011
4:58 pm

“This one doesn’t take math skills. The blue like is the dollar. Look at where is was immediately above the “2008″ then look at where it is immediately above the “2011″ Within the band, they’re pretty much the same.”

Umm……both lines are the dollar…….against 2 other currencies………..

Mighty Righty

September 13th, 2011
4:58 pm

So the president makes a speech before a joint sesson of congress and nationaly televised that he is going to stimulate job growth by cutting taxes on small business. Not a mention of increasing taxes on small business which was also part of the plan. Let’s see, decrease taxes on small business and increase taxes on small business will increase jobs. This kind of thinking is psychotic. It is identical to Obamacare where we add 20 to 40 million uninsured to the healthcare roles while cutting healtcare cost. Insanity in the white house. Democrats liked to joke aout a village missing its idiot. Well, we found him. His name is Barack Hussein Obama and he is tempoairily residing at 1600 Pennsylvania Ave., in Washington, D.C.

Bosch

September 13th, 2011
4:59 pm

So…..we can’t buy as much cheap Chinese or other stuff because we live here and use our own dollar, but people in other countries can buy our stuff, global demand. Do I have it right, Doggone?

Bosch

September 13th, 2011
4:59 pm

“Or we can just go to Teasers and smoke”

Sweet!

md

September 13th, 2011
5:01 pm

“The reverse is also true, md”

Not necessarily……….we need protected capital regardless of amount of employment………it isn’t an inverse relationship………

Low inflation with xx or xxx employment is going to be better than high inflation with xx or xxx employment.

Doggone/GA

September 13th, 2011
5:01 pm

“Umm……both lines are the dollar…….against 2 other currencies………..”

doesn’t really matter. it’s the relative comparison across years that is the issue.

Schrodinger's cat

September 13th, 2011
5:02 pm

,jay- “In Perry’s mind….” and “…is less a debate about economic policy than a question of values”

How do you have any idea what’s in Perry’s mind? I not sure he knows
And that’s what you may have heard about policy but it was never spoken…your projection is to beat them up about what they didn’t say or how they didn’t say it?

josef

September 13th, 2011
5:04 pm

JAY

Yeah…her…it was all good! She’s one A+ individual in my book…but, small world, after all isn’t it!

Aquagirl

September 13th, 2011
5:04 pm

Not necessarily……….we need protected capital regardless of amount of employment………

And just when I thought we were outta new ways to say “let them eat cake,” md outdoes himself.

Matti's Malaise

September 13th, 2011
5:05 pm

“Single Charter?” Hmmm… Is that anything like “Single Payer?”

Thulsa Doom

September 13th, 2011
5:05 pm

what you heard last night is the expression of GOP doctrine that the interests of capital must be protected at all costs, and the interests of working people are of lesser importance and don’t deserve equal consideration.- Jay

Jay,

Are the interests of capital and the interests of working people mutually exclusive?

Secondly you are correct in that a weaker dollar is not necessarily bad. It means that our exporters- Ford is a good example, can more successfully compete in international markets. The problem there is that if they make a lot of money overseas then aren’t they going to keep that money offshore which is a mighty big concern to liberals. And secondly aren’t they going to end up “offshoring” jobs if they end up doing a lot of business overseas which is one of the top complaints right now against corporate America.

Jay

September 13th, 2011
5:06 pm

Mine as well, Josef. She helped us raise two great kids, and now has two of her own.

I’m getting old, dude.

md

September 13th, 2011
5:07 pm

“And just when I thought we were outta new ways to say “let them eat cake,” md outdoes himself.”

Hmmm……..you might want to look at it like this……..currently, we have 10% unemployment……with 90% employed……….with no inflation…………

Now add inflation to the same equation……….better or worse?

A Retirement in Time saved Mine

September 13th, 2011
5:09 pm

And just when I thought we were outta new ways to say “let them eat cake,” md outdoes himself.

md was kind enough to provide, earlier, his own personal basis, and hence, bias, for wanting all others to feel the consequences of choices. Da judge told him so.

Schrodingers cat

September 13th, 2011
5:10 pm

Doggone…all three currencies lost vale but not relative to one another

Thulsa Doom

September 13th, 2011
5:10 pm

Bosch @ 4:59,

You pretty much got it right. A weaker dollar means that products from overseas cost us more to buy so that Chinese cheap crap may not be so cheap as the dollar gets weaker. And that weak dollar makes our products for export more affordable to foreigners which of course boosts our exports and our earnings- especially manufacturing.

Bosch

September 13th, 2011
5:10 pm

um, md, is a dudette.

josef

September 13th, 2011
5:11 pm

JAY

I felt that when she told me y’all’s relation….jeeze! But you want old, just wait the the granddaughter starts to tell you about her “boy friend!” :-)

Bosch

September 13th, 2011
5:12 pm

“You pretty much got it right.”

SWEET! I was always a good student. I still don’t know what all that means in the grand scheme of the universe though. B

But I can explain offsides to anyone who needs to know. We all have our strengths.

md

September 13th, 2011
5:12 pm

“md was kind enough to provide, earlier, his own personal basis, and hence, bias, for wanting all others to feel the consequences of choices. Da judge told him so.”

I think too many of you think it is an either or equation………..holding one accountable can be accomplished while helping…………..

Doggone/GA

September 13th, 2011
5:12 pm

“Now add inflation to the same equation……….better or worse?”

to my way of thinking, we DO have inflation…and have had for a VERY long time. I watch an interesting home renovation show whenever I can. When I see, as I did last night, a young couple who bought a house that was probably built in the 1920’s, and MAYBE cost $5000 to build at the time…for half a MILLION DOLLARS…I’d call that inflation.

A Retirement in Time saved Mine

September 13th, 2011
5:12 pm

um, md, is a dudette.

Oops. I dint know dat.

md

September 13th, 2011
5:13 pm

“um, md, is a dudette.”

um….no he’s not……..

A Retirement in Time saved Mine

September 13th, 2011
5:14 pm

I think too many of you think it is an either or equation

You would need to present the equation you refer to in order for me to attempt to make a determination of it’s possible solutions.

josef

September 13th, 2011
5:14 pm

Back in a while…open house tonight…paste that smile on and get the diplomacy ready! Actually, this is not a bad thing at all,,,doesn’t last that long and the parents are great…and thanks for the chance to get the ranh-ranh out of my system… :-)

Aquagirl

September 13th, 2011
5:15 pm

Okay, md outdoes HERself, thanks for the correction. Who knew a woman would use so many ellipses?

Bosch

September 13th, 2011
5:16 pm

“um….no he’s not……..”

Well damn! I have been fooled all these years! But like some here who like to use the feminine as a derogatory thing, I do not.

Genuinely — my apologies.

Paul

September 13th, 2011
5:16 pm

Don’t have anything but a gut feeling on this, but I wonder if the rank and file understand the implications of their sound bites. Reminds me of “such and such has unfunded liabilities of a gazillion dollars!!!!” Then you ask them “what’s an unfunded liability and how is it computed?” and I get a blank look. Or if I’m on a blog, a long wait while they go to google.com.

So is this another case of the base defending the interests of the power brokers and they don’t even understand the implications other than ‘rally the troops and defeat Obama”?

Doggone/GA

September 13th, 2011
5:16 pm

“all three currencies lost vale but not relative to one another”

But not across the years they didn’t. They all went up, they all went down…and as of 2011 ended up at pretty much the same place they were 3-4 years ago.

Bosch

September 13th, 2011
5:17 pm

I’m sorry, I’m sorry, I’m sorry Aquagirl, Retirement and md.

Jay

September 13th, 2011
5:17 pm

I’ll put that off as long as possible, Josef, while hoping that it does happen SOME day.

Joe Mama

September 13th, 2011
5:18 pm

G. Heathen — “Or we can just go to Teasers and smoke”

That sounds kinda like one’a them nekkid lady bars.

A Retirement in Time saved Mine

September 13th, 2011
5:18 pm

I am not an economics major but I did hear once that inflation tends to increase with decreasing unemployment rate and that an unemployment rate of, I think, something like 4% is good for helping to strike a balance. The poor four. There’s no hope for them.

Bosch

September 13th, 2011
5:20 pm

“but I wonder if the rank and file understand the implications of their sound bites.”

That’s what I was wondering too Paul — like at the beginning of this thread when I wrote that they probably didn’t know what they were agreeing too.

I think most of them, like me (and most other Americans), understand bits of economic theory seperately, but not how they relate to each other and what it all means.

md

September 13th, 2011
5:20 pm

“to my way of thinking, we DO have inflation…and have had for a VERY long time. I watch an interesting home renovation show whenever I can. When I see, as I did last night, a young couple who bought a house that was probably built in the 1920’s, and MAYBE cost $5000 to build at the time…for half a MILLION DOLLARS…I’d call that inflation.”

And that is true……but we are talking short term here……protecting against a rapid rise………

Aquagirl

September 13th, 2011
5:20 pm

um….no he’s not…….

See, I knew a woman would never hog all the punctuation. It’s not in line with our nurturing, gaia-worshiping chromosomes. :)

Mighty Righty

September 13th, 2011
5:20 pm

The reason our government says there is no inflation is because they leave out the two biggest consumer expense items. Unbelievably, they don’t count energy cost or e great if we had food cost! Wouldn’t it be great if we had Bush gasoline, electricity, heat, and food prices? There has been no COLA for social security recipients since Obama was elected.

pogo

September 13th, 2011
5:21 pm

Since you brought up the term “mumbo-jumbo” Jay, everyone needs to take a good hard look at Obama’s “jobs bill” and who will end up paying for it. The taxpayers (not just the illusive and much maligned “rich”) will be saddled with paying the lions share of it. The “luxury jet owners” and the oil companies contributions are miniscule. And the biggest piece of mumbo-jumbo is that this half of a trillion dollar “jobs bill” (translated into “government speak”, one trillion dollars”) is supposed to be paid for in the next 5 to 10 years. Just as Obamacare is supposed to pay for itself in the next 5-10 years, which we all know is a joke. Obama always promises that all the excessive spending he proposes will be paid for starting in 2013 and it is supposed to be paid for in some ill-defined time long after he is gone and forgotten. More people are in poverty right now in this country than they have been since the early 50’s. Some 50 million people are on food stamps and this has increased dramatically under Obama. I look at this stimulus as Obama’s last gasp effort to fork out enough of us taxpayers money to reward his supporters (mainly the unions) so they perhaps can carry him in 2012. I think it is a fools game he is playing though. He is considered a misery president now (much like Hoover) and while there may be a slight uptick in job creation due to government paid jobs if his “bill” goes through, these will fizzle quickly just as they have already done on the other trillion dollar spending sprees he has been on. And our country will be one trillion dollars further in debt.

And remember the name “Solyndra”. This is going to come back and haunt Obama and show the corruption that has been going on with this administration.

Thulsa Doom

September 13th, 2011
5:21 pm

A better measure would have been the dollar vs the Asian currencies. I wonder how we would stack up against them.

Our currency has dropped but then so has the Euro due to the debt woes of Greece and several other countries.

Bosch

September 13th, 2011
5:21 pm

Paul,

Forgot this part:

“unfunded liability and how is it computed”

Like, I know what an “unfunded liability” is, but don’t know how it’s computed, nor why that is important, or if it’s important to begin with.

A Retirement in Time saved Mine

September 13th, 2011
5:22 pm

I think it is safe to say that Perry does not know much about economics. I don’t know what the other candidates learned on the subject while in school.

Bosch

September 13th, 2011
5:23 pm

“It’s not in line with our nurturing, gaia-worshiping chromosomes”

And me being the resident Neo-Pagan, I should have known (I have failed).

md

September 13th, 2011
5:23 pm

Another way to look at it……….capital goes up, unemployment goes up…………..

If the price of goods is inflated, folks buy less………..and less demand does what?

Aquagirl?

Schrodingers cat

September 13th, 2011
5:26 pm

Doggone – “as of 2011 ended up at pretty much the same place they were 3-4 years ago.”
__________________________________________

yep @25% down from 4 years before that…..

Thulsa Doom

September 13th, 2011
5:26 pm

Jay,

I’ll ask a second time. Are the interests of capital and the interests of working people mutually exclusive. If so explain your reasoning why.

Jefferson

September 13th, 2011
5:26 pm

Deflation is great until they cut my paycheck….

md

September 13th, 2011
5:26 pm

Other currencies?

New Zealand has almost doubled in 2 years against the dollar……………that is a fast rise……or fall…..however one wants to look at it.

jm

September 13th, 2011
5:27 pm

Without a stable currency, there cannot be full employment. Witness the stagflation of the 70’s.

Jefferson

September 13th, 2011
5:28 pm

In reality, money is worthless. Belive it or not.

Bosch

September 13th, 2011
5:28 pm

“Deflation is great until they cut my paycheck….”

I’m finance stupid and even I know deflation is bad, bad, bad.

Jay

September 13th, 2011
5:29 pm

No, Thulsa, they’re not. (didn’t see your earlier inquiry)

Jefferson

September 13th, 2011
5:29 pm

B- you don’t like it when gasoline prices go down ?

md

September 13th, 2011
5:29 pm

Bosch…….now I’m starting to worry about you…….we’ve had this discussion before………..

Might want to drink more coffee……..new studies say it helps with dementia………..

And studies also show a link between dementia and marijuana………..????

Aquagirl

September 13th, 2011
5:32 pm

If the price of goods is inflated, folks buy less

Yes, if wages don’t keep up. I advocate the radical communist idea that maybe companies should pay workers instead of sitting on stacks of cash, or using that money for executive bonuses.

Bosch

September 13th, 2011
5:32 pm

md,

Please don’t mention dementia and senility — that caused so much trouble here. :)

So much, have you no shame?

Paul

September 13th, 2011
5:33 pm

Bosch

“Like, I know what an “unfunded liability” is, but don’t know how it’s computed, nor why that is important, or if it’s important to begin with.”

But it’s a really, really big number when we talk about SS, Medicare, Medicaid. And it’s big while Obama is president.

So the programs are not sustainable and Obama’s why.

Ever thought about how for quite a while now we haven’t heard “blame Bush” from Pres Obama, but all you hear from the Right on any issue (including the Texas heat wave) is “it’s Obama’s fault!!”?

Bosch

September 13th, 2011
5:34 pm

Deflation IS bad because my smart friend who knows stuff TOLD me it was bad!

And it makes sense that if the price of things go down, businesses make less money and people lose their jobs and stuff like that.

Jefferson

September 13th, 2011
5:35 pm

Hence the “until”…

Thulsa Doom

September 13th, 2011
5:35 pm

md and jm,

Ya’ll get it. Nobody else seems to be though.

Bosch

September 13th, 2011
5:36 pm

“Ever thought about how for quite a while now we haven’t heard “blame Bush” from Pres Obama”

Yes, yes, Paul, I have! Adam and I were mentioned that yesterday.

“but all you hear from the Right on any issue (including the Texas heat wave) is “it’s Obama’s fault!!”?”

Because they are stupid and don’t know what they are talking about?

Bosch

September 13th, 2011
5:38 pm

“were mentioned?”

What the hell is wrong with me?

jm

September 13th, 2011
5:38 pm

Currency fluctuations are a form of instability. Instability is capital unfriendly. Capital goes where either it can get a high return to compensate for instability (not the US), or it will go where there are lower returns if there isn’t instability.

Jobs cannot be formed without capital investment. Therefore, a stable currency (level subject to debate) is capital friendly. Arbitrarily depreciating a currency is bad. But the Chinese have changed the rules of the game (because they’re stupid and don’t understand economics).

jm

September 13th, 2011
5:40 pm