I see overnight the good doctor has struck at her lab rats again. Allow me a few points:

1. Why is it “Mr Conrad” but merely “Simon”? Surely I deserve a Mister?

2. I’d like to take credit for introducing the term “voodoo economics” into the previous thread.

3. Conrad and I did both dismiss most of MAJ’s (seemingly plagarised) critiques as being the work of non-mainstream economists and bitter novelists. However we ALSO comprehensively detailed, several times, the underlying economic reasons MAJ’s arguements were wrong. No one has addressed these economic arguements.

4. The good Doctor maintains MAJ is largely right and Conrad and I are avoiding Iraq. However if you read the thread (and I’m not asking you to) the original assertion was a rant about the US dollar and oil based on misguided economics. Iraq is at best a peripheral issue in that debate. But these days you can’t seem to have a debate without dragging in Iraq, even if it’s not connected.

5. These remarks were not cut and paste from any other website.

July 11, 2005 @ 6:57 pm | Comment

Simon, great comment, thanks!

Frankly, my eyes glazeed over and I skipped all those economic comments from yesterday – when people start citing Gore Vidal as a resource on global economics I tune out.

July 11, 2005 @ 7:04 pm | Comment

Dear Simon,

You will need to address point No.1 directly with Dr Myers. Point No.2 is taken, and accepted. Point No.3 goes without saying.

Point No.4 I take issue with: the topic was initiated by me, and I introduced it in a way which related to Iraq. The argument of Clark et.al, which I endorse, is that one of the reasons why the Bush administration went into Iraq was because it feared that by switiching from the US dollar to the Euro, Iraq was setting a dangerous precident.

This line of argument is based on the economic assumption that if large numbers of Middle East oil producing nations, particularly OPEC nations, were to, in a short space of time, all make this switch in the pricing currency of oil, it would impact on the status of the US dollar as the international reserve currency. If this were to happen, demand for US dollars would fall and hence so too would its value (some economists say that this fall could be between 20-40%).

You and Conrad disagree. You don’t believe that a switch in the pricing currency of oil will directly impact on the value of the US dollar. You may be right in thinking that, but the argument here is that the oil pricing currency switch could lead to the US dollar losing its use value as the one and only international reserve currency, and if this were to happen, then the dollar’s value would almost certainly fall, and significantly so.

Clark bases his argument on the views of a former US government economist, and as I mentioned yesterday, George Soros also believes that a switch by oil-producing nations from the dollar to the Euro would result in a decline in the value of the dollar – for starters, speculation would arise about the long-term future of the dollar as a reserve currency. This is exactly what has been happening in fact – China and Japan, for example, along with numerous other nations, have been buying more Euros, and less dollars, because of this. Now that the future of the Euro is beginning to look increasingly shaky, both China and Japan have started playing it safe, and are buying more gold than they used to.

Regards,
Mark Anthony Jones

July 11, 2005 @ 7:16 pm | Comment

Dear Richard,

I NEVER cited Gore Vidal as a source of global economics – I simply mentioned, in passing, that he too endoreses the views of Clark et.al., just as I do.

Regards,
Mark Anthony Jones

July 11, 2005 @ 7:18 pm | Comment

Well gee, you were talking about global economics and cited Gore Vidal as someone who endorsed the opiinion, so we’re parsing this mighty fine. 🙂

Anyway, I didn’t even bring your name up in the comment above. Perhaps I was referring to someone else who brought up Gore Vidal as a source of global economics. Lighten up.

July 11, 2005 @ 7:25 pm | Comment

Simon, if it makes you feel better, I’ll call you “Mr. Simon”. I don’t want you to feel somehow excluded from the patronization.

July 11, 2005 @ 7:40 pm | Comment

Thank you, Mr Will.

July 11, 2005 @ 8:02 pm | Comment

Well, Simon, isn’t it obvious? Mr. Conrad goes on about his penis, so it’s clear that he is a mister. By pointedly avoiding all discussion of your genitals, we hesitated to emphasize your “Mister-ness”, lest we offend a differently-gendered person.

Sam; person of pallor

July 11, 2005 @ 9:05 pm | Comment

MAJ:

Even allowing you to change the subject of debate mid-stream isn’t going to do you any good. You are still wrong. A change in reserve currency (to the Euro or whatever) would hardly make any difference at all to the US economy.

But don’t take my word for it, here’s the left’s favorite economist, Paul Krugman, on the subject:

People almost always attach far more importance to the issue of reserve currencies–the role of the dollar and its rivals in international trade and finance- -than the subject deserves.

But doesn’t the dollar’s special role give us some advantage? Most of the international role of the dollar comes from its use as a “unit of account”–the measuring stick for international business. When a Japanese refiner buys Kuwaiti oil, say, the contracts are in dollars. This is a testament to U.S. economic influence, but flattery aside, it’s hard to see what we get out of it.

What about our ability to borrow in dollars, to sell dollar- denominated bonds to foreigners? Hey, other countries do that too. But our debts are in our own currency! So? We still pay interest on them. True, we could inflate away our foreign debt. But we won’t–and if investors thought we would, they would demand higher interest rates.

Well, then, you may say, surely the international role of the dollar forces people out there to hold dollars for transaction purposes. Yes, but not so you’d notice. When Daewoo repays a dollar loan from Sanwa, it writes a check on its account with some international bank. True, that bank itself surely maintains an account in New York, backed in part by non-interest-bearing reserves held at the Fed. So the U.S. does in effect get a zero-interest loan out of the dollar’s international role–but it probably amounts to only a few billion dollars, small change for an $8 trillion economy.

Where the U.S. does get a free ride is from the willingness of foreigners to accept our currency–actual bills. Foreigners hold more than $200 billion of American money. Guess what kind of business requires payments of large sums in cash, by people unconstrained by official restrictions on possession of foreign exchange? That’s right: the dollar is the world’s premier medium of illicit exchange. Every year the U.S. ships foreigners $15 billion in cash (about 0.2% of GDP), and gets real goods and services in return. Better not ask what kind.

So the threat to the U.S. from the rise of the euro is this: five years from now, when wise guys in Vladivostok make offers you can’t refuse, the payoffs may be in 100- euro notes instead of $100 bills. The loss of such business might cost the U.S. economy as much as 0.1% of GDP. Somehow, I think we can live with that.

http://web.mit.edu/krugman/www/seignor.html

July 11, 2005 @ 9:07 pm | Comment

Sam_S, I don’t want to make molehills out of mountains.

July 11, 2005 @ 9:28 pm | Comment

oh. my. (insert preferred deity here).

y’all need to go outside. seriously. literally. step away from the computer.

July 11, 2005 @ 10:12 pm | Comment

I have a feeling the post about Mark below is going to be tonight’s open thread. it is crazy!

July 11, 2005 @ 11:13 pm | Comment

Okay boo, if we need a break from all the wild comments coming in below, here’s a new article on traffic in Shanghai. I remember getting stuck in a taxi in Pudong for more than 90 minutes, forcing me to miss my plane. And now it actually seems worse.

July 11, 2005 @ 11:21 pm | Comment

I have it on good authority that conrad is a figment of the imagination of Dr Anne Summers.

July 11, 2005 @ 11:55 pm | Comment

KLS

Thanks you for spotting MAJ as a fraud. He’s duped a lot of people for a hell of a long time.

I take it your profession caused you to spot his cut+pasting?

July 12, 2005 @ 12:06 am | Comment

so you’re suggesting Martyn that I cut and paste for a living !!

July 12, 2005 @ 12:20 am | Comment

by the way, did you guys know that American Man is in fact the Lucasian chair of mathematics?

July 12, 2005 @ 12:23 am | Comment

Now there’s a thought I hadn’t, er, thought about…….

July 12, 2005 @ 12:27 am | Comment

…about you cutting and pasting for a living that is…

July 12, 2005 @ 12:28 am | Comment

I guess it always pays to be sceptical. wasn’t it a reagan motto: trust, but verify.

July 12, 2005 @ 12:33 am | Comment

That’s what I tell my friends heading into any relationship: “Trust, but verify.”

I gotta give Reagan credit for that one.

July 12, 2005 @ 12:37 am | Comment

Reagan? I’m shocked Lisa.

July 12, 2005 @ 12:42 am | Comment

Well, it’s one of the only things I can come up with.

July 12, 2005 @ 12:48 am | Comment

And now for something completely different

July 12, 2005 @ 12:57 am | Comment

A little light reading that might explain where MAJ was coming from on the economics front: Folk Economics

Nice link, Conrad. A little NSFW warning wouldn’t hurt.

July 12, 2005 @ 1:09 am | Comment

Ooops, link didn’t work. Let’s try that again: Folk Economics

July 12, 2005 @ 1:10 am | Comment

I am indeed a direct descendant of Sir George Airy. Now, Put that in yer pipe and smoke it. Cambridge was such a bore.

July 12, 2005 @ 3:40 am | Comment

KLS, I don’t use lube!

July 12, 2005 @ 3:41 am | Comment

Hm, does Professor John Nash ever post here?
(Nah, he got over his schizophrenia years ago. For the most part.)

July 12, 2005 @ 4:04 am | Comment

I see that sign that Richard posted about the other day has been picked up in Japan. Or it might be another sign. Still, it won’t do China any good to have Japanese people reading about it.
From Yahoo:
————————————————–
“BEIJING (Reuters) – Japanese customers must apologise for their country’s wartime occupation of China before getting a seat at a restaurant in former Manchuria or find another place to eat, Japan’s Kyodo news agency said on Tuesday. No Japanese had tried to enter the restaurant in the northeastern Chinese city of Jilin since it started the new apology policy and hung a sign that read “Japanese people barred from entry”.
————————————————–

July 12, 2005 @ 5:07 am | Comment

This appeared in today’s SCMP. The mobile phone market in China has already reached saturation point, much the same as many other industries like automobiles, next it’s going to be the world according to Laurence Brahm.
————————————————–
LAURENCE BRAHM
Deaf to reality

The current mobile phone market supply exceeds demand. With output continuously increasing, the industry investment risk increases every day.

Despite warnings from government departments that a bust cycle is incubating, new investments are pouring into the industry.

By 2002, 130 million handsets a year were being produced on the mainland. The number reached 300 million last year. Industry sources estimate it will hit 500 million this year. Even so, many companies are chomping at the bit to increase output. So, when is the crash coming?

In the mainland, Adam Smith’s logic does not work because greed is so overpowering that everyone goes to extremes – without thinking through the logical consequences of the bust cycles around the corner.

Such excessiveness has international implications, as well. China’s estimated output of 500 million handsets this year already accounts for 80 per cent of world demand.

The world market simply cannot accept the projected volume of telephones that is being produced in the mainland.

As price cutting begins in the domestic market, one can only envision what effect it will have on the international one. Little wonder that the NDRC wants to adopt measures to consolidate the industry, to prevent competitive price cutting and low-quality production.

In 1992, Beijing was so paranoid about mobile communications that, every time I brought a mobile phone across the border from Hong Kong, I had to show a big plastic card covered with public security and telecom department stamps, because the security risk was considered so great.

Many enterprises are beginning to lose money. Some are suggesting restructuring before the sector bottoms out. This highly successful industry is now in the process of cannibalising itself.

Like so many things in the mainland, it is swinging from one extreme to the other.

July 12, 2005 @ 5:18 am | Comment

Martyn, I wouldn’t at all be surprised.

Many reporters spend a large portion of their day surfing blogs to pull a MAJ.

Reuters did it to me on the Chengdu demonstrations.

July 12, 2005 @ 8:40 am | Comment

You’re joking? Is that right? Reuters?

July 12, 2005 @ 8:52 am | Comment

This place was a lot more fun when we talked about sex and pot, and about life in China.
MAJ is becoming boring now. I humbly suggest that we just let him disappear.

July 12, 2005 @ 12:39 pm | Comment

what did reuters do to you gordon?

July 12, 2005 @ 1:19 pm | Comment

I think they used text from his blog in an article…. If so, I’d be flattered.

July 12, 2005 @ 1:20 pm | Comment

Hey Richard,
Right back atchya!
So, as I said a few posts ago, when can we get back to talking about sex and pot? 🙂
(Or about sexpots, like Anne Coulter in a mud-wrestling match…)
Oh alright, I do NOT think Anne Coulter is sexy. I think she has no sex at all, because she is not Human.
Let’s talk about REAL women, like Juliet Binoche, and Jennifer Connelly, and REAL MEN, um, like ME, and Richard, and American Man, and Howard Dean….
🙂 🙂

July 12, 2005 @ 1:27 pm | Comment

Who the … is Anne Coulter?

July 12, 2005 @ 2:21 pm | Comment

Do a search — she’s almost as bad as MAJ in terms of alternate realities.

July 12, 2005 @ 2:31 pm | Comment

I wanna give Anne Coulter my disease.

July 12, 2005 @ 5:39 pm | Comment