China to create currency test zone

Paul Romer imagines a kind of private micro-state, a “charter city” built on unused land, donated from a country that wants to stimulate economic growth. It needn’t be a place mired in poverty and corruption and unable to find its way out, such as Honduras, where the charter city idea has recently found support — and competition. A professor of economics at New York University, Prof. Romer thinks the concept could be adopted in advanced countries, too, such as Canada.

  The tension between Central Banks that we noted yesterday continues to worsen. This time it was China and the EU, not just Germany, that fired warning shots at the US Fed. A senior Chinese official said on Friday that the United States should cut back on printing money to stimulate its economy if the world is to have confidence in the dollar.

"In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and god-like intelligence for kings." -- Aristotle

Peter Morici submits:Google’s (GOOG) censorship struggle with Beijing crystallizes the challenge China poses to American global leadership.Until the Google imbroglio, we heard much about China’s undervalued currency and subsidized exports, rough treatment of foreign investors and purchases of US debt, but not enough about Beijing’s restrictions on unfretted access to information, expression and self determination.Americans

From Steve Craven comes more evidence today that the Mainstream Media are finally catching on to the fact that the US government's obsession with China's currency is really misguided.  On monday, the WSJ's Peter Stein saw the light, and today the NYT's David Leonhardt does the same:

Daniel Zurbrügg submits:The recent IMF meeting in Washington ended without any firm results despite intense discussions. There were a few important points on the agenda but probably the most important one was the discussion about the threat that a global currency war is about to break out.

Brian Rezny submits: It’s war…at least if you ask Brazilian Finance Minister Guido Mantega: “We are experiencing a currency war. Devaluing currencies artificially has become a global strategy”.