BrotherMaynard

China as Scapegoat, Again

points well taken.

just to add:

feldstein in today's FT: www.ft.com/cms/s/0/fd4...

krugman in last weeks nyt: www.nytimes.com/2009/1...

China as Scapegoat, Again

look, you're implying that there is some sort of "virtue" associated with saving and that consumption is a "vice."

The only vice in economics is disequilibrium and the only virtue is equilibrium. the more disequilibrium, the bigger the problem. chinese consumption as a % of GDP hit 30% with the recent gov't stimulus program...that is an all-time low for any country at any point in time. that is disequilibrium at an extreme...get your gaussian model out and assign a x-sigma to that event.

obviously, the US is at the opposite end of that balance. but to suggest that there is some sort of inherent benefit to infinite savings, falls in line with a socioeconomic heuristic that does little towards solving the current dilemma, and in fact, falls into the category of disinformation.

China as Scapegoat, Again

first of all, a $2tr+ reserve build across any period of time shorter than a millenium should always ring a collective alarm bell. the aggregate demand that has been displaced by this black hole is scores larger than the other countries mentioned. when those other countries build reserves as large as china has, on both relative and absolute basis, then they should get chastised. but china is by no means a scapegoat with $2tr+. it takes a very deliberate effort to rack up that number and a very indifferent trading partner.