The core of the “currency wars” – in which China has been accused, primarily by the US, of undervaluing the renminbi to boost its exports – is a simple piece of arithmetic. The US has only a quarter of China or India’s population.
America can remain the world’s largest economy only if average Chinese or Indian living standards never exceed 25% of its own. As – rightly – China and India will never accept this, a peaceful global outcome therefore requires the US to abandon its undesirable and impossible goal.
The immediate political background is September’s vote by America’s House of Representatives threatening China with tariffs unless it increases the exchange rate of its currency.… Seguir leyendo »
This week sees the 200th anniversary of Mexico’s war of separation from Spain; in addition, 20 November marks the centennial of Mexico’s landmark revolution, the first mass uprising of the underclass in the Americas. The coincidence of centennials has given breath to the hypothesis that Mexico explodes every 100 years in social upheaval, and some leftists are eagerly expecting renewed fireworks in 2010. Indeed, conditions are ripe for revolution here: 70% of Mexico’s 103 million population teeter on and around the poverty line.
According to the World Bank’s chief economic economist for Latin America, Augusto de la Torre, half the 10 million Latin Americans who tumbled into poverty during the economic downturn are Mexicans; and 28,000 citizens have been slaughtered since President Felipe Calderón declared a war on the drug cartels in 2006.… Seguir leyendo »