On Wed, 11 Mar 1998, Mark Jones wrote:
> The US is not falling behind, it is
> moving ahead. And Japan and Germany are not going to catch up and
> overtake Anglo-Saxon capitalism anytime soon, if ever. BTW, people write
> off Rule Britannia too easily. As the 51st state of the Union, we are
> doing rather well. To call us 'irrelevant' is seriously wide of the
> deutschmark, now worth one-third less than the UK pound from 18 months
> ago.
Ah, yes, this explains the amazing resurgence of that British car
industry, yes? As well as those powerhouse Brit electronics/software/
semiconductor firms, busily clobbering Mitsubishi and Microsoft for
market share. The DM is undervalued, deliberately so; German
industrialists didn't like the Bundesbank's neo-monetarist interest rate
policy in the early Nineties, so since then German rates have been reduced
to subzero levels.
Japan is exhibiting a similar, temporary undervaluation vis-a-vis the
American dollar, due to superlow real interest rates as compared with the
American Fed's relative tightness. And I know I've said this before, but
I'll keep saying it until people understand: we are NOT dealing with some
WW II return of the evil Japs/Krauts scenario, we're dealing with Central
Europe and East Asia, multinational zones of hyperaccumulation. These
zones are self-financing, meaning that they can get away with reducing
interest rates to nothing and still haul in the cash from their industrial
investments. The US, on the other hand, is a net international debtor,
meaning that we are dependent on those low overseas rates for our capital
financing, and not the other way around. Unless you've got solid evidence
to the contrary?
-- Dennis
