Roach: I think we should take the baseball bat out on Paul Krugman

By Edward Harrison On Mar 19, 2010

Notable quotes in this 5 minute segment:

"They don’t want to look in the mirror. America doesn’t have a China problem. It really has a savings problem. America has the biggest shortfall of national savings of any leading country in modern history. And when you don’t have saving you have to run current account deficits to import surplus savings from abroad and run massive trade deficits to attract the capital. Last year America ran trade deficits with over 90 – that’s right nine zero –countries.

I think we should take the baseball bat out on Paul Krugman. I think the advice is completely wrong.

Isn’t it the height of hypocrisy that America can articulate a particular position in its currency but the Chinese are not allowed to do that.

Senator Schumer’s been bashing China now for about five years. I think he’s probably been to China once during that period. And he always has the view no matter where the Renminbi is, that it’s 27 and a half percent undervalued.

Wow!

Also see Roach Rebuffs Krugman Call to Pressure China on Yuan from Bloomberg News.

3 Comments

august says 15 years ago

I cannot say any better than this.
bravo roach. it’s no wonder you were the chief economist of morgan stanley.
Glen says 15 years ago

Bang on. If any deficit running country didn’t run on stupidity, and a foreign funded consumption binge, and ran a reasonable surplus then the issue would be non-existent.
Attitude_Check says 15 years ago

Roach is a pompous, bought and paid for Chinese mouthpiece. China doesn’t allow the Yuan to float for a reason — and it’s not to facilitate balanced trade, or improve the buying power of their people. It is to more greatly empower the political elite that control the country and hence control the large foreign reserves.

Of course the US power elite have benefited from a strong $ enabled by a manipulated weak Yuan, and the reality of significant $ demand because of it’s use as the international reserve currency.

The trade imbalances are a direct result of monetary imbalances. One way or another this will ultimately become fixed. Either through a full-stop economy (0 imports and 0 exports) or a economically correct monetary revaluation for both the Yuan and $.

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