Luo’s dung beetle blues

“We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”

Those being the words of one Mr. Luo Ping, a director-general at the China Banking Regulatory Commission.  We can take some cold comfort in the fact that China will continue to lend us the money to give to the wizards who bet the house and lost.  The Chinese are like the wife of a gambling addict, withdrawing the money from her bag lady fund so that the husband can place one more bet…and maybe, hopefully, win the house back.  Mr. Luo doesn’t leave much to the imagination; there’s nothing there except seething resentment.  It’s hard to blame him.  How many people knowingly invest in a money losing scheme?

Well, the Chinese do.  Partly, they understand that some of the money they lend will come back to them in the form of commerce.  On the other hand, a depreciating dollar means that less will come back unless the Chinese can get the Yuan lower, though they already keep it purposefully low.

The low Yuan raises American ire, as if revaluing the Chinese currency would magically erase our economic problems.  Perhaps there is a contingency plan in place to get China to offshore its manufacturing to Indiana so that we might then be an economic powerhouse.  A revalued Yuan would make everyday low prices for the American consumer a lot less low.  The growing legion of unemployed and underemployed would surely sing the praises of higher prices for all the crap we just can’t live without…and no longer have the credit to buy without paying.

Yet Treasury, headed by it’s new-tax-evader-in-chief, is calling for just such a revaluation.  The idea is always popular in Congress.  Of course it is, Congress has never met a scapegoat it wasn’t willing to sacrifice on the altar of populist outrage.  Only Congress would go to someone with hat in hand and then attempt to beat the person with the hat…and still expect it to be filled with money.  China doesn’t need Disneyland; it already knows what if feels like to be a real, live American.

Thankfully there is at least one grown up involved in this situation, and the Chinese aren’t threatening to pull the plug.  They have that power, though it would result in mutually assured economic destruction.  We’ll know that real trouble is afoot when Chinese central bankers start talking about how “all options are on the table”.  Until then, sleep easy America.  The Chinese will front us our stimulation, and they don’t even want buy up our banks…too shady.

The moral here is that the world is not flat, as evidenced by the fact that shit still rolls downhill.  Someday the dung beetles of the planet are going to get fed up with their Sisyphean task.


~ by Lex on February 13, 2009.

2 Responses to “Luo’s dung beetle blues”

  1. I realize it’s not the central point of your post – but dung beetles are wonderful. They are some of my favorites.

    I’ve been wondering about the plight of the average worker in China these days. They left their agrarian life to move to the big city to work in the factories. They no longer have work and they no longer have anything to go back to either. Economics is not my strong suit, but I keep wondering how we all got sold this bill of goods? That was one massive consumer stupor we all fell into.

    It feels bleak and undirected.

  2. Dung beetles are cool, i mostly used them here as a literary device…it was all i could think of that might have a chance of rolling the shit back up hill.

    It isn’t my strong suit either, but i’ve made an effort to understand it more over the past year or two. Angry is how i imagine most Chinese workers feel.

    I recently finished a book called Bad Samaritans that seems to offer an excellent answer to the question of how we got here…without ever veering into the “kill all the capitalists” type polemics. I’m trying to write up a review (amongst a long list of half-finished writing projects…sigh).

    And i agree on how it feels. I’m actually ok with whatever happens to my life because of all of this, but i have two young nieces and two young nephews. Thinking of what their lives might look like to pay for the consumer stupor makes me pretty angry.

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