John, unpegging China's currency to USD is a necessary pain.
He's hurt retires as much as one can - they are living on 2% after inflation, if they are lucky. I gave an elderly lady a $9 tip for hemming my skirts because she grossly under charged, and she hugged me as if $9 would save her life. It's not good out there for retires.
And Greenspan really has no more bubbles to pursue.
The housing bubble has been caused by extremely low interest rates (46 year low), supported by China's influx of capital.
So you pull the plug on China's capital, that'll pull the plug on real estate (via higher interest rates), and that'll pull the plug on consumer refi spending.
I would expect a decrease in consumer spending as a result. But a necessary pain. I think Greenpsan has created the most dangerous bubble, so pervasive to many households. This is no stock bubble which impacted a smaller percent of households.
I don't believe in avoiding pain, but hitting it head on. Seeing our govt juggle bubbles makes me nervous.
By the way, it'll cost Intel a lot more to make things in China after a currency adjustment. I don't think that's going to help the semiconductor companies at all - their labor will go up, while their US Consumer revenue will be impacted. (And if US consumers are buying less imports from China, that'll mean China's consumers may be buying less too.)
Sounds to me like Mr Snow wants to shake today's profits out of semiconductor companies. Hightech is always getting picked on. I don't like it when people claim they are doing something to help you, when they aren't. A spade should be called a spade.
Regards,
Amy J |
