On Jan 30, 2008, at 12:23 PM, Julio Huato wrote:
> Doug wrote:
>
>> rising export dependency really does undermine the decoupling
>> argument
>
> I don't think it does. It's like saying that your relying on your car
> undermines the insurance argument -- the argument that you could
> insure it against accidents or theft.
I'm not sure this metaphor is apt. The stats from Roach show Asia having grown more dependent on exports over the years, not less, suggesting that their economies haven't made a turn towards greater reliance on domestic demand. In other words, they could get hurt by a U.S. recession, and perhaps seriously. Sure, reserves are a form of insurance, but I doubt governments are going to spend them on domestic job creation schemes; they seem more interested in buying pieces of Blackstone and Citigroup.
> Chavez, Lula, Kirchner, Castro, Morales, Ortega, and Correa are
> starting up a South American bank. Already, Chavez, Lula, and Correa
> abandoned the IMF de facto.
Oh yes, but that's a whole different ball of wax from Asia's export dependence. In fact, these are political moves that are intended to lay the foundations for decoupling; Asia has done none of that.
Doug