JWG

Central Bank Efforts Are Stimulating ... for Gold's Price

David wrote,

"Europe’s central bank president Jean-Claude Trichet, to be sure, has been talking about the need for euro-zone national governments."

Gee, I never knew this had been questioned. This European thing has gone farther than I knew.

/jwg

China's Graduates

Ma-lin: Pettis didn't say it was hard to start up a business in China. He said not very many young Chinese wanted to try.

Michal P: you wrote of "the latte 70's". That's a typo, right?
You meant "the latte 90's", right? OK, maybe you've been out of the country....
/jwg

China: From Crony Capitalism to Geopolitical Mercantilism?

Cam, You wrote "then we will see a reflationary boom in the next cycle followed by a deflationary collapse." I'd like to know more about your rationale/source for anticipating a second deflationary collapse after the intervening reflationary boom.

Thanks
Jim G.

Would a Trade War Help Solve the Problem of Excess Capacity?

Michael,

Thanks for another excellent article.

A question. Suppose China actually did dramatically stimulate its domestic consumption and imports. How would that affect the value of the dollar?

One might argue that taking a trillion dollars out of the Chinese mattress and restoring them to circulation would increase the world supply of dollars and would be inflationary.

Or one might argue that it would choke the gusher of uneconomic dollar debt at the source (the US current account deficit), and shift US lending away from consumption and toward investment in real productive assets, stabilizing the dollar.

I can't see an argument that it would be outright deflationary, but maybe I lack imagination.

Any opinions?

Thanks