It was good seeing you the other day at lunch. I meant to share a story with you but the room was too crowded and the story is too long. So I write to you today sharing something that will surely lift your spirits just the way you lifted mine when I first heard you speak in May of 2007.
China is manipulating the value of its currency. No doubt, it’s artificially low. Lower value makes Chinese goods cheaper than they would otherwise be. It also makes our goods more expensive to buy within China. The US can’t control that. By trying to, we will touch off a trade war at the very worst time. Currency manipulation might work for short periods of time, but it’s not a policy for long term growth.
These words are also being echoed by statisticians who measure such things. The most recent ISM report shows that manufacturing has come to a standstill, thus discarding the term “soft patch” in favor of the newest global buzzwords: “global slowdown.”
I can't say we're teetering on that precipice, but Zuckerman's article got me thinking: Imagine if America today experienced an economic catastrophe similar to the 1930s. How would you survive?