What I'm reading: A Chinese Gold Standard?

By Fareed Zakaria

“China’s nearly $4 trillion in reserves — accumulated through its mercantilist trade policies — give it plenty of ammunition to claim leadership in the creation of a new monetary order,” writes Kwasi Kwarteng in the New York Times. “The Chinese, however, are most unlikely to bid for monetary hegemony in the near future. For the past 25 years they have pursued a policy of aggressive export growth to drive their economy. China successively devalued its currency, from 1.50 renminbi to the dollar in 1980, to 8.72 in 1994. (Today the renminbi trades at 6.20 to the dollar, which the United States still considers artificially low.)”

“Could China someday peg its currency to gold, as Britain did in 1821? China has the reserves to do this, and it could have the political will, if the dollar proved to be unreliable as a store of value in the future.”

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“Recommending Finlandization for Ukraine is bad advice on several levels,” writes James Kirchick for American Interest. “First, it misunderstands and misinterprets Finland’s experience, either downplaying or outright ignoring the costs that this policy imposed upon the country’s democracy. Proponents of Finlandization discount the danger that it posed to the European continent as a potential model for other countries susceptible to Russian pressure and influence. Furthermore, compelling neutrality upon an unwilling Ukraine is a stark moral capitulation to foreign aggression. Foreclosing the possibility of EU and NATO membership to Ukraine would shred the basic precepts of Europe’s post-Cold War security architecture, enshrined in agreements stipulating that countries be allowed to choose their own political and security alliances free from foreign intimidation and threats.”

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“What began as a ruthlessly pragmatic, take-no-prisoners parliamentary style opposition to Obama was linked to constant efforts to delegitimize his presidency, first by saying he was not born in the U.S., then by calling him a tyrant trying to turn the country into a Socialist or Communist paradise,” writes Norm Ornstein in the National Journal.

“These efforts were not condemned vigorously by party leaders in and out of office, but were instead deflected or encouraged, helping to create a monster: a large, vigorous radical movement that now has large numbers of adherents and true believers in office and in state party leadership. This movement has contempt for establishment Republican leaders and the money to go along with its beliefs. Local and national talk radio, blogs, and other social media take their messages and reinforce them for more and more Americans who get their information from these sources. One result is that even today, a Rasmussen survey shows that 23 percent of Americans still believe Obama is not an American, while an additional 17 percent are not sure. Forty percent of Americans! This is no longer a fringe view.”