Money, the dollar and China


Two good articles on money, the dollar and China.

With two serious errors by Nouriel Roubini:

Gold is still a barbaric relic whose value rises only when inflation is high.

Pure keynesianism. Compare with the other article: “In China, many people refer to the dollar as mei jin, or “American gold.”” Why would the Chinese call money “gold”? And, surprisingly, gold seems to be a good hedge against deflation.

Now that the dollar’s position is no longer so secure, we need to shift our priorities. This will entail investing in our crumbling infrastructure, alternative and renewable resources and productive human capital — rather than in unnecessary housing and toxic financial innovation.

The myth of the crumbling infrastructure rises again. Together with “alternative” and “renewable”, which related to energy means the most inefficient ones: solar and wind.

Financial innovation does not have to be toxic: government intervention in finance always is. Government is so incompetent at providing money that it had to outlaw the competition: gold, the barbaric relic.