Courtesy of Mike Whitney
Say what you will about Alan Greenspan, he was never a whiner. Unfortunately, the same can’t be said for present Fed chairman Ben Bernanke. Bernanke’s speech on Friday at a conference for the European Central Bank (ECB) was so full of crybaby blabber that attendees must have thought they’d ducked into a Frankfurt daycare center by mistake. What an embarrassment! For nearly an hour, Bernanke went on and on about how mean China is and how they manipulate their currency to gain competitive advantage. It was surreal; like listening to a serial arsonist complain about his wife smoking in bed. Here’s a sample:
“Currency undervaluation by surplus countries is inhibiting needed international adjustment and creating spillover effects that would not exist if exchange rates better reflected market fundamentals,” Bernanke moaned.
Let’s get this straight, when China’s dollar peg was helping to recycle hundreds of billions of dollars into dodgy mortgage-backed securities and inflating a monstrous asset bubble that enriched Bernanke’s crony friends on Wall Street, everything was hunky dory. But now that the Fed can’t pump up another credit bubble by lowering interest rates, out come the handkerchiefs and everyone is supposed to feel sorry for poor little Bennie. Waah!
Why should China care about "market fundamentals"? China is doing what is right for China. What’s wrong with that? Americans wish that their government would operate the same way and implement policies that support the interests of US workers instead of lining the pockets of multinational capitalists and bank-vermin.
Here’s more from Bernanke:
"The exchange rate adjustment is incomplete, in part, because the authorities in some emerging market economies have intervened in foreign exchange markets to prevent or slow the appreciation of their currencies. … why have officials in many emerging markets leaned against appreciation of their currencies toward levels more consistent with market fundamentals? The principal answer is that currency undervaluation on the part of some countries has been part of a long-term export-led strategy for growth and development. This strategy, which allows a country’s producers to operate at a greater scale and to produce a more diverse set of products than domestic demand alone might sustain, has been viewed as promoting economic growth and, more broadly, as making an important contribution to the development of a number of countries."