Spat Over The Yuan Will Shake Global Finance -- Wall Street JournalOnce a Bush administration critic, Paul Krugman has turned his sights on China
.... Nobel Prize winning American economist Paul Krugman first took on George W. Bush. His new opponent is rather more powerful: the Chinese Communist Party, insisting that it revalue the nation's currency, the yuan.
The debate between Krugman and Beijing is hitting headlines around the world, and the outcome will determine the shape of the global economy as it emerges from the downturn ....
Read more ....
My Comment: $3 trillion in reserves .... for any country that is a lot of "soft power", and no one (including the U.S.) is underestimating it's impact.
US reaction to this growing power has been very interesting. Paul Krugman provides the intellectual legitimacy for the Obama administration when it comes to financial affairs and decisions .... any remarks that he makes is a reflection of what the White House and Treasury is thinking and should be taken seriously.
No surprise .... the Chinese have taken noticed and have reacted appropriately. In short .... they are telling Paul Krugman (and the U.S.) to butt out of their affairs. Considering how weak the U.S. is in international financial circles, coupled with its high deficits and out of control spending .... the Chinese have the upper hand in this matter and I know that they will use it without hesitation.
Paul Krugman protestations not withstanding.
Update: Geithner Visits China Bearing ‘Olive Branch’ Ahead of Summit -- Bloomberg
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