Interesting article today in the paper noted that Hu Jintao the President of China, admitted that his country has a human rights problem and that it needs to work on it.
The article notes that human rights advocates have criticized this confession during the Chinese leader's trip to the White House as being merely words with no confession backing them.
While the criticism rings true inasmuch as China really hasn't done very well at all on this issue, the statement still says an incredible amount about the state of China's policy development.
1. It notes that Chinese leadership, on some level, acknowledges that human rights are a good thing. Regardless whether they have any actual intent to improve their track record, it means that as a public position, they are moving towards an ideal.
2. It also means, again on some level if not to a great extent, Chinese policy decisions are being influenced by international pressure. Be it pressure to maintain relations with the US (for economic reasons) or to develop a better image for more general trade and power purposes.
All this should be qualified by saying that, yes, words are cheap. But there is still some substance to be gleaned from this statement.
Thursday, January 20, 2011
Tuesday, January 11, 2011
More Evidence that We Aren't Out of the Woods Yet
A recent Wall Street Journal Article discusses calls by academic economists at the American Economic Association annual meeting for even stricter reforms on the banking sector beyond what has already been done. Obviously, the experts are suspecting that persistent weakness in the US banking sector provides plenty of reason to suspect that a further bursting of the liquidity buble is possible.
Take this in consideration with a recent post by former IMF economist Barry Eichengreen who points out that internationally there still isn't a significant fallback option for the international monetary system.
Eichengreen notes that the fall of Ireland is spreading contagion, more importantly, he notes elsewhere their "rescue package" is inevitably going to come back to them, adding more stress to the EU banking sector. To top this off, austerity in the rest of the Union will keep economic growth meagre at best and ultimately will prevent the Euro from usurping the USD as the global dominant currency.
He notes that there may be some room for the Canadian Loonie and the Australian Dollar to absorb some of the excess foreign investment but that the majority of it will remain in the US, largely for lack of an alternative place to settle.
That said, if the USD is the best currency available and the reforms called for by the AEA ring true to the continued fragility of the US, what does this say for the next 10 years of global economic recovery.
Perhaps its time to start pushing alternative monetary schemes as a failsafe in the case of another monetary meltdown. Even though it's still viewed as unsustainable, a nation-wide development of regional or local currencies may provide a fallback measure and encourage local cooperation should the current global market crash again.
What are the other options?
Clearly, there are more questions than answers
Take this in consideration with a recent post by former IMF economist Barry Eichengreen who points out that internationally there still isn't a significant fallback option for the international monetary system.
Eichengreen notes that the fall of Ireland is spreading contagion, more importantly, he notes elsewhere their "rescue package" is inevitably going to come back to them, adding more stress to the EU banking sector. To top this off, austerity in the rest of the Union will keep economic growth meagre at best and ultimately will prevent the Euro from usurping the USD as the global dominant currency.
He notes that there may be some room for the Canadian Loonie and the Australian Dollar to absorb some of the excess foreign investment but that the majority of it will remain in the US, largely for lack of an alternative place to settle.
That said, if the USD is the best currency available and the reforms called for by the AEA ring true to the continued fragility of the US, what does this say for the next 10 years of global economic recovery.
Perhaps its time to start pushing alternative monetary schemes as a failsafe in the case of another monetary meltdown. Even though it's still viewed as unsustainable, a nation-wide development of regional or local currencies may provide a fallback measure and encourage local cooperation should the current global market crash again.
What are the other options?
Clearly, there are more questions than answers
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