agreed, that’s a very astute way to look at it.

let’s hope TPTB understand this before too long so as to avoid undue suffering on top of the suffering already bubbling below the surface.

I think a very, very strong case can be made for this already, as long as you include the petrodollar recycling flows. Greenspan’s “conundrum” was actually a very serious warning signal.

No matter how po’ed the Chinese are about the situation, I don’t see how they have a lot of room for maneuver. The time begin significant revaluation was two years ago or so.

Also, I imagine that cooler heads there realize they had a hand in this by their aggressive accumulation of $ assets.

I’ve wondered if 30 years from now people will consider the Chinese/Asian financing of exports at least as much to blame for the current situation as the loose Fed policy.

It seems a bit of a chicken/egg dilemma to me.

It depends. Does he address the masses, without sugarcoating, to face the problems? Does he ask those well off to sacrifice ill gotten gains?

One of the problems with Carter was he as a neophyte about how the game is played in DC. He was honest but a neophyte . . . I don’t think you can make the same case with Obama

http://www.forbes.com/reuters/feeds/reuters/2008/11/07/2008-11-07T175801Z_01_L7110206_RTRIDST_0_FINANCIAL-EU-UPDATE-5-PIX-TV.html
“This is a global crisis and we have to remember where it started,” Sarkozy said.

“The time when we had a single currency (the dollar), one line to be followed, that era is over and it came to an end on Sept. 18 when responsibility was taken without our opinion being asked with the failure of a major banking institution (Lehman Brothers (nyse: LEHMQ – news- people )), and the consequences all follow from that,” he said.”

Yes, President Obama is pro-labor all right. But ask yourself, after three or four years L-shaped deep recession(or depression), will the electorate still be pro-Obama? The electorate believe after a magic quick fix from Obama, they will have another Clinton golden era, but they may instead get another Carter malaise. What happen then?

It won’t be “painless” indeed.

It is something to think about now in India and China, with a pro-labor US president taking over next year. It kinda all happened at a wrong time for them. US re-alignment from consumption to production will not be painless for anybody, including the US.

I hate to sound like an idiot, but what change does China desire? It’s seemed to me, they were one of the key players in what’s called Bretton Woods II system.

Bob, China has had a lot of different desires at a lot of different times from a lot of different organs, so I don’t blame you for feeling some confusion. They are likely confused themselves. Yves is probably referring to the recent front-page editorial in the People’s Daily, reported here:

http://www.nakedcapitalism.com/2008/10/china-launches-salvo-against-dollar.html

Personally, I think their original plan was to handle currency adjustment mostly through domestic inflation rather than explicit devaluation. Events may have changed that.

I hate to sound like an idiot, but what change does China desire? It’s seemed to me, they were one of the key players in what’s called Bretton Woods II system.