In his NYT column today, “The Renminbi Runaround“, economist Krugman complains that the Chinese are playing unfair currency games.
“China’s exchange-rate policy is neither complicated nor unprecedented, except for its sheer scale. It’s a classic example of a government keeping the foreign-currency value of its money artificially low by selling its own currency and buying foreign currency.”
I like Krugman as much as I can like anyone who subscribes to the nonsense called economic theory. But the fact is that Paul is lost the funhouse. China has learned from us that the way to win the game is to manipulate the vig. In a reality that places profit as the highest calling, why waste energy creating something of value when you can churn money and con the other guy into making you rich? A sense of fair markets has nothing to do with making a profit. Just ask any whiz kid working on Wall Street.
