Tuesday, 29 December 2009
Chinese Premier, Wen Jiabao, learns from Goebbles.
Goebbles (Hitler’s propaganda minister) suggested that if you want to tell a lie, tell a whapper – i.e. don't tell a small lie. People often don’t notice “whapper” lies (for very roughly the same reason as they often “can’t see the wood for the trees” - though the "wood and tree" idiom is not quite the right one!).
Wen Jiabao has claimed that efforts by other countries to get China to revalue its currency are an attempt to contain China’s development. Jiabao’s REAL motive for an undervalued currency probably has more to do with the fact that that an undervalued currency puts purchasing power into the hands of the country’s political elite rather than into the hands of its citizens. And politicians in those ironically named “communist” countries have an even bigger distain for ordinary citizens than Marie Antoinette had for HER subjects.
An undervalued currency results in a big build up in a country’s foreign currency reserves, which (big surprise) the elite politicians in the country concerned control. I.e. they can use these reserves to further their political aims (e.g. put political pressure on other countries or buy lots of lovely foreign manufactured military hardware, etc).
In contrast, a currency revaluation puts purchasing power into the hands of ordinary citizens: e.g. it enables them to go on foreign holidays, or purchase foreign produced consumer goods more easily.
And not only that but the idea that a revaluation would stymie China’s development is bunk. China’s development has come primarily from, first, applying Western technology, and second, from its OWN savings (unlike many developing countries, which have relied on FOREIGN capital.) Revaluing would result in Chinese manufacturers selling fewer consumer goods to the US, and more to Chinese citizens. This of itself would have zero effect on Chinese development.
The other very old trick that Jiabao is playing here is justifying his claims by reference to an external enemy.
It’s a pity that China’s leading politician is the same sort of lying shyster as leading politicians elsewhere on planet Earth.