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Calling China’s Bluff

Posted by Matt in August 15th, 2007

America should not live in fear. As Peter Morici, economics professor at the University of Maryland”s Robert H. Smith School of Business, has argued, “If the Peoples Bank of China were to sell enough Treasury securities to disrupt financial markets and cast the U.S. economy into recession, where would China’s factories sell all their stuff? Where would all those Chinese living in cities work if their stuff does not move? What would they do with their time if they were laid off? Oust their government? Riot in the streets? The Chinese Communist Party can make effective threats to disrupt the U.S. economy only if Americans are stupid enough to panic.”

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