Is China At Forefront of New Global System?

by Dual Income No Kids on May 15, 2009 · 0 comments

My wife Miel is a world traveler. She’s been all over, the Middle east, Asia, Africa and Europe. This has given me a sense of the importance of looking at economics from a global perspective.

Now, what I fear is happening is that because of America’s never ending budget deficits and titanic job losses, we are losing our economic preeminence. As we lose our economic preeminence, it makes everything from quality of life to ability to build wealth, much more dificult. Case in point, the latest article from The Economist:

Creditor nations tend to set the rules and the new global monetary system will be unable to operate without the approval of China, a creditor country that has capital controls and a managed currency. It has been assumed that China will have to move towards the Western model. But why not the other way round? Western countries adopted free capital markets, as the British adopted free trade in the 19th century, because it suited them. Will China now be able to call the shots? Uncomfortable as it might be for the West, the next monetary order is more likely to be made in Beijing than in New Hampshire

There might be some truth to this, click here for the article.

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