Uploaded January 2011 | Updated September 2026, 1 day ago
Seriously, as long as people keep asking for our deficit to drop and yet do not want to resolve the trade imbalances (such as China wanting to export more to us than they import), then they're asking the impossible. Our deficits make their trade surplus possible, and vice versa. This is one of the reasons I was so dissatisfied with the SOTU, the analysis of it, and the responses to it: we need to - scratch that, sooner or later we WILL import less compared to the amount we export, along with higher savings. How painful it is depends entirely on whether we let it happen through a crash, or we actually take some form of action to make it happen (and even then, it won't be fun or pretty).
Krugman on what orifice China is pulling money from:
krugman.blogs.nytimes.com/2010/03/16/capital-export-elasticity-pessimism-and-the-renminbi-wonkish
Wikipedia detail (if you're interested, Krugman's post gives you the basics, though):
en.wikipedia.org/wiki/Current_account
en.wikipedia.org/wiki/Capital_account
"The Chinese Are Coming!" by TheResident
youtube.com/watch?v=PpAh5m2Z1g8
China is not going to have a serious reserve currency anytime soon. In fact, they're weaker in relation to us than Japan was in the 80s:
mpettis.com/2010/10/it-isn%E2%80%99t-easy-being-green
Niall Ferguson is strange, and doesn't seem to be worried about the bubble China and the U.S. are sitting on.
"Ferguson Says China `Threatening Rival' for U.S. Economy"
youtube.com/watch?v=fz9SxzamDJY
For those of you who don't know who he is, he's the idiot who said this:
youtube.com/watch?v=4mli7OjrB3M
Some more sober looks at what's going on:
"The real cost of Chinese NPLs" (NPL = Non Performing Loan)
mpettis.com/2011/01/the-real-cost-of-chinese-npls
December's home sales increased to a record low:
calculatedriskblog.com/2011/01/new-home-sales-increase-in-december.html
My state's Legislature sucks:
nakedcapitalism.com/2011/01/virginia-legislature-proves-who-really-rules-pro-consumer-mortgage-bills-sent-to-siberia.html
Initial takes on the Financial Crisis Inquiry Commission are good on the surface:
calculatedriskblog.com/2011/01/financial-crisis-inquiry-commission.html
But miss a few important things:
nakedcapitalism.com/2011/01/guest-post-robert-shiller-argues-that-rising-inequality-in-the-us-was-a-major-cause-of-the-recent-crisis-and-little-is-being-done-to-address-it.html
And these omissions could be a symptomatic of much larger systemic problems:
nakedcapitalism.com/2011/01/fcic-insider-i-cant-believe-they-suborned-brooksley-born.html
Hang on tight, people!
Seriously, as long as people keep asking for our deficit to drop and yet do not want to resolve the trade imbalances (such as China wanting to export more to us than they import), then they're asking the impossible. Our deficits make their trade surplus possible, and vice versa. This is one of the reasons I was so dissatisfied with the SOTU, the analysis of it, and the responses to it: we need to - scratch that, sooner or later we WILL import less compared to the amount we export, along with higher savings. How painful it is depends entirely on whether we let it happen through a crash, or we actually take some form of action to make it happen (and even then, it won't be fun or pretty).
Krugman on what orifice China is pulling money from:
krugman.blogs.nytimes.com/2010/03/16/capital-export-elasticity-pessimism-and-the-renminbi-wonkish
Wikipedia detail (if you're interested, Krugman's post gives you the basics, though):
en.wikipedia.org/wiki/Current_account
en.wikipedia.org/wiki/Capital_account
"The Chinese Are Coming!" by TheResident
youtube.com/watch?v=PpAh5m2Z1g8
China is not going to have a serious reserve currency anytime soon. In fact, they're weaker in relation to us than Japan was in the 80s:
mpettis.com/2010/10/it-isn%E2%80%99t-easy-being-green
Niall Ferguson is strange, and doesn't seem to be worried about the bubble China and the U.S. are sitting on.
"Ferguson Says China `Threatening Rival' for U.S. Economy"
youtube.com/watch?v=fz9SxzamDJY
For those of you who don't know who he is, he's the idiot who said this:
youtube.com/watch?v=4mli7OjrB3M
Some more sober looks at what's going on:
"The real cost of Chinese NPLs" (NPL = Non Performing Loan)
mpettis.com/2011/01/the-real-cost-of-chinese-npls
December's home sales increased to a record low:
calculatedriskblog.com/2011/01/new-home-sales-increase-in-december.html
My state's Legislature sucks:
nakedcapitalism.com/2011/01/virginia-legislature-proves-who-really-rules-pro-consumer-mortgage-bills-sent-to-siberia.html
Initial takes on the Financial Crisis Inquiry Commission are good on the surface:
calculatedriskblog.com/2011/01/financial-crisis-inquiry-commission.html
But miss a few important things:
nakedcapitalism.com/2011/01/guest-post-robert-shiller-argues-that-rising-inequality-in-the-us-was-a-major-cause-of-the-recent-crisis-and-little-is-being-done-to-address-it.html
And these omissions could be a symptomatic of much larger systemic problems:
nakedcapitalism.com/2011/01/fcic-insider-i-cant-believe-they-suborned-brooksley-born.html
Hang on tight, people!
