The Fundamental Reason Why Yuan Manipulation Is Going To Be A Huge Economic Issue For A Long Time

zhou china chinese

Everyone wants to be an exporter.

It’s as simple as that, and that’s why Paul Krugman is trying hard to stoke the flames of this debate once again.

As Edward Harrison recently noted, there have to be some losers in this scheme to give jobs to everyone by producing stuff, and exporting it to other countries. Not everyone can be a net exporter, like China or Germany.

And though the US consumer benefits from the buying power of a strong dollar, the scheme to get more jobs by producing more and exporting more will be tough to get off the ground.

There’s not a simple, satisfying answer to this issue — but it’s obvious that the issue will persist, especially if the US jobs situation remains stalled.

The other solution, besides an ongoing battle over currency, is for there to be some huge new fundamental global boom, like tech in the 90s. Anyone got any ideas?

Don’t miss: 9 signs that the double dip is dead >

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