Last night, an economic advisor to the People’s Bank of China, Fan Gang, suggested that China may resume a “managed float” of the yuan. He said that a return to the pre-crisis structure may happen particularly if the uncertainty over the economic recovery diminishes. Fan warned against a one time revaluation as it would pose an economic danger to both China and the United States. Fan Gang is a professor of economics at Beijing University, director of China’s National Economic Research Institute and a member of the PBOC’s monetary policy committee was writing in an opinion piece published by the … …READ MORE
Monthly Archives: March 2010
ECB Supports Greece, but Market Asks,” Who’s Next”?
A couple of weeks ago, I attended the NABE conference in DC and had the chance to hear the ECB’s Juergen Stark speak. His topic was, “Is the Global Economy Headed for a Lost Decade. At that time, there was considerable uncertainty over whether there would be any help forthcoming to assist Greece with the debt and austerity program. On that morning, there appeared to be some agreement between France and Germany for assistance and this was seen as a breakthrough for discussions on a backstop lending program. At the luncheon for Stark, he specifically made clear how he felt … …READ MORE
Tax Policy versus Currency Policy
Today, the House Ways and Means Committee (Chairman Levin, D-Mich.) will hold a hearing on China’s exchange rate policy, focusing on its immediate and long-term impact on U.S. and global economic recoveries and job creation, and steps that could be taken to address the issue according to CQ. Here’s a list witnesses scheduled:
C. Fred Bergsten, director, Peterson Institute for International Economics
Niall Ferguson, professor, Harvard University, Cambridge, Mass.
Philip I. Levy, resident scholar, American Enterprise Institute
Clyde V. Prestowitz, president, Economic Strategy Institute
Also today, US Treasury Secretary Tim Geithner is meeting with Chinese Ambassador Zhang Yesui at Treasury, … …READ MORE
Financial Regulatory Reform:
Interesting speech by Federal Reserve chairman Ben Bernanke on Saturday before the Independent Community Bankers of America. “As the crisis has shown, one of the greatest threats to the diversity and efficiency of our financial system is the pernicious problem of financial institutions that are deemed “too big to fail.” Clearly, this and other comments regarding the Fed’s role in regulatory oversight were timed perfectly to coincide with the commencement of debate in the Senate on FRR. In case you think this is going to be easier than the health care bill, there are already roughly 400 amendments that have … …READ MORE
Posted in Front Page Tagged Ben Bernanke, congress, financial regulatory reform, Sen. Corker, Sen. Shelby Leave a comment
So It Begins….
According to Reuters, U.S. Senator Charles Schumer said on Friday he plans to move forward soon on legislation aimed at stopping China from “manipulating” its currency. “Now more than ever, there is a consensus to finally confront China’s currency manipulation,” the New York Democrat said in a statement. “It is the single biggest step we can take to promote U.S. job creation, particularly in the manufacturing sector. We plan to move forward with revamped legislation on this issue in the coming days,” he said.
Yesterday on Fox News, U.S. Senator Charles Grassley said that the United States should label China … …READ MORE
Posted in Front Page Tagged China, Chinese currency, Sen. Graham, Sen. Schumer, trade war Leave a comment
SUMMER CONGRESSBUSTER
In a point I’ve been making in speeches recently, Congress has very limited time to get things done this year. Yesterday upon the release of the financial regulatory reform bill, Sen. Dodd said they only have about 60 days to get this done. The summer break and the mid-term elections are going to limit the schedule.
Here’s one more big one: expect a Supreme Court retirement this summer. In a bombshell New Yorker interview, Justice John Paul Stevens announced he is likely to retire before Obama leaves office and potentially this summer.
In the interview, he told the reporter he … …READ MORE
Posted in Front Page Tagged congress, federal deficit, Justice Stevens, US Supreme Court Leave a comment
Wen Answers The Call
By now, most of you have read the comments by Chinese Premier Wen Jiabao at his annual press conference. However, there are some aspects worth expanding on for their importance. With arm sales to Taiwan, Dalai Lama meeting, and the Copenhagen climate talks all important areas for questions, the very first question he was asked and addressed dealt with the currency. This doesn’t happen randomly. Clearly, this issue is of critical importance to the Chinese. “First of all, I do not think the renminbi is undervalued…We are opposed to countries pointing fingers at each other or taking strong measures to … …READ MORE
Posted in Front Page Tagged Chinese currency, Senator Schumer, US trade policy, Wen Jiabao Leave a comment
China + Free Trade=Jobs
Thursday, President Obama addressed the key subject of US trade policy. Last year, the Obama administration set a goal of adding two million jobs to the economy by doubling exports in the next five years. The added benefit is that export related jobs are generally higher paying than domestically focused work with the likely exception of government jobs. Last October, I met with senior US Treasury officials who adamantly supported this approach.
Yesterday, we also got the US trade deficit number for the month of January which improved 6.5% to -37.3 billion. The breakdown by region in billions tells the … …READ MORE
Politics and Unemployment
Jobs are clearly on the minds of those in Washington, D.C. The Temporary Extension Act of 2010 allows for another 14 weeks of jobless benefits to be extended to those out of work which would cost a CBO estimated $8.6 billion.
By now, most of the United States is familiar with the Jim Bunning story and how he held up a vote on jobless benefits. Bunning was pilloried by Democrats and the Huffington post for stalling funds from going to help unemployed people. But did it? The Chicago Tribune carries an interesting story that asks due, “Longer jobless benefits cause … …READ MORE
Pay-Go Turnstile:
Yesterday, I wrote about Jim “Man a La Mancha” Bunning’s attempt to enforce the Pay-Go rules of the Senate and his failure. Last night, the US Senate voted 60-37 to waive the Budget Act (Pay-Go) rules for the tax extenders amendment and add almost another $100 billion on to the US deficit. While even Greece appears to be addressing its overspending ways, the US Congress continues to pour it on. The train wreck gathers speed.… …READ MORE
