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China, Trade, and Quantitative Easing

January 17, 2011 by Leave a Comment

The Chinese President, Hu Jintao, makes a visit to Washington this week. Newly elected Republicans want action against an undervalued Chinese currency that is costing American jobs. And three Democratic senators are introducing legislation to address the issue.

Stiff new penalties would be imposed on designated countries that misalign their currency to unfairly harm trade.

Of course it is easy for the United States to recognize that China is misaligning its currency to unfairly harm trade because that is what the U.S. is doing with quantitative easing.

Filed Under: Currency, Employment, Government, Markets ·

Euro Falls — Market Wins

July 25, 2010 by Leave a Comment

My uncle likes to say, “The market always wins.” For believers in big government who may not understand this neat little phrase I will explain with an untidy big phrase:

No matter how much government distorts the market with tax credits, subsidies, bailouts, etc., the market will eventually bring the financial system back to equilibrium. Or until the market collapses under a crushing bureaucratic weight.

Case in point: Apparently the sham called a stress test of European banks has done nothing but stress the Euro. It looks like the market continues to win.

And that is just as well. The alternative is for the market to totally collapse.

Filed Under: Capitalism, Markets ·