Swamp Fox
10-14-2005, 01:49 PM
Even if it continues to manipulate its currency, its foreign exchange reserves will make appreciation inevitable. (http://www.iht.com/articles/2005/10/14/business/wbyuan.php) Its attempts to keep the yuan low by buying securities will not work, because, as the Japanese found out, it will raise the price of those bonds, and, when the inevitable crash happens, it will take a bath, just as the Japanese have.
The question now is who will take those low-wage jobs - there are lots of candidates available, from Ethiopia to Armenia, whose people can work for $1 a day. The other question is how the world can keep the global economy chugging, so as to prevent social unrest on a worldwide scale. Removing economic barriers will help, but they may not be good enough for high-wage societies. I think that allowing for more technological breakthroughs will create opportunities for overall wages to keep rising, but the problem is that it's very hard for governments and policy makers to make that happen.
What do you think?
The question now is who will take those low-wage jobs - there are lots of candidates available, from Ethiopia to Armenia, whose people can work for $1 a day. The other question is how the world can keep the global economy chugging, so as to prevent social unrest on a worldwide scale. Removing economic barriers will help, but they may not be good enough for high-wage societies. I think that allowing for more technological breakthroughs will create opportunities for overall wages to keep rising, but the problem is that it's very hard for governments and policy makers to make that happen.
What do you think?