Geithner is learning about trying to negotiate without leverage. Either that or doing some creative role-playing.

Gordon Haave writes:

The whole concept of the "competitive devaluation" is a farce. No country has ever gone broke because it's currency was strong. A competitive devaluation is the equivalent of burning down your own house so that now you are so desperate for work you will work for less than anyone else. 

Gary Rogan adds:

I am no expert on the history of monetary standards and I'm not interested in or prepared to advocate the gold standard, but I have seen and read enough to claim that a system that severely limits the variability in the quantity of money in circulation by some decentralized feedback mechanism would work better than a few voting members of the FOMC being able to decide to target higher inflation, buy trillions of whatever securities strike their fancy, and just in general behave like a bull in a china shop while citing questionable economic theories and their discredited judgment as justification.

And are they politically motivated? I can't read their minds, but all indications are that they owe allegiance to whomever happens to be President at the moment. Overall I consider them an un-democratic (small d) and anti-democratic institution and one in the long list of poster children of how bad centralized control of anything economic really is.


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