One month ago, in “Superpower Smackdown – Germany vs. China” I wrote:
“Germany and China are economic superpowers because they have exchange-rate dominance. The Germans keep their European Union satellites enslaved via the euro. The Chinese have been transferring the USA’s industrial power to themselves via their yuan-dollar currency peg.”
And yesterday, this was in the headlines of the Wall Street Journal:
“The euro has punished Southern Europe the way China’s currency has hurt the United States.”
Here’s a picture (click to enlarge):
Nice, huh? What will be in the WSJ headlines a month from now? I don’t know; I haven’t decided yet (ha, ha).
Austan Goolsbee discussed Germany and Europe in his opinion piece, but I was disappointed that he didn’t say anything further about China. Nonetheless, I’m glad to see my meme taking root in the minds of economics professors. If enough of them come around, it will be easier for the politicians to finally do something about China.
The USA is an economic satellite of China, and likely to stay that way unless something is done soon.