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Thursday, February 5, 2009

WHY THE $US HAS APPRECIATED IN THE GLOBAL ECONOMIC CRISIS, AND HOW THIS AFFECTS US-CHINESE ECONOMIC AND POLITICAL RELATIONS

Today's 2nd Buggy Topic

You'll find prof bug's extensive commentary on two related topics at a web site run by Dr. Brad Setser:

  • Why the $US has appreciated noticeably in the current global financial and economic crisis, mainly by attracting so much capital inflow from abroad. 
  • And how,, more specifically, the over-valued $US influences our trade, investment, and overall relationship with China.

Dr. Setser, a Harvard and Oxford graduate and a former US Treasury official, posts daily on a variety of international economic topics . . . always illuminating and worth reading.  His site is actually run by the Council on Foreign Relations, and it has some other interesting blogs.  Setser's posts, please note, are generally non-technical and generally easy to follow . . . assuming anyway you remember the basics of your Econ 101 micro- and macr0-economies.

Click here for the Setser thread and prof bug's lengthy reply.

Note Quickly: Please Read the Previous Buggy Post for Today (February 5th, 2009)

It deals at length with why, on the one hand,  Gorbachev's efforts to reform the Soviet economy and political system --- the former reform depended on changes in how the Soviet government and CP worked to control Soviet life --- failed . . . to the point that the reform movement unleashed turmoil and political polarization that sent the decrepit Soviet system into a tailspin and self-destruction by 1991.    And why, on the other hand, China's post-Maoist CP leadership has been more successful by far in its reforms to date --- with a bugged out analysis at the end of the major challenges that still confront the leaders . . .  and why the likelihood of successfully tackling these challenges will hinge on the willingness of the CP big-shots to devolve over time enough of their huge power, prestige, and money-making that in effect they will be committing hari-kari in the process.

Click here for that previous buggy post.