For KYli: Read Adam Smith sometime, he was a lot more progressive than he is oft given credit. For one, he was a strong advocate of progressive taxation, and argued that taxing the lowest income workers was essentially self defeating. He called taxes on income and profits the fairest possible taxes, then dismissed them both out of hand because, from his late 18th Century vantage point he could see no way to collect accurate information regarding personal income or business profits without excessively intrusive investigations of everyone. Today it is a moot point. So no, I think even a progressive has a hard time arguing with Adam Smith, except maybe with his advocacy of retaliatory tariffs. Isn't that surprising? Keep in mind the "market" as Adam Smith defines it has to have a nearly infinite number of both buyers and sellers, so that everyone is what he calls a "price taker". In other words, the overall interactions of too numerous to count buyers and sellers sets the market price, and no one or two entities have the power to do anything that could possibly affect the market price. You either take it or leave it. In actual markets, this is often not the case. UPS and FedEx together command 80% of the package shipping market in the US. This is not a market as Adam Smith defines it, any action FedEx does UPS must respond to and vice versa. There are lots of other such markets. Coke vs Pepsi anyone? Airbus vs Boeing? Lever Brothers vs Proctor and Gamble? Lots of markets are dominated by two or three big firms. There is no theory of how such oligopolies behave that has any predictive ability at all. There may be something lurking in game theory but so far the complexity of the mathematical relationship has defeated all efforts. There is certainly a Noble Prize for the person or team who work this out, so go for it! One must not just understand how markets are supposed to behave in theory, but also understand how the often fail in actuality. By calling for fully floating currencies I am calling for an end to fiat currencies. Currency values will be determined by their value in trade. As far as specie goes, it has failed every time it is tried. For an economy to grow, banks or some other such entity must make loans to existing and new businesses. Such loans are no different than printing money. I bet you never looked at it that way did you? There really is no difference. The bank puts a number in a deposit account when you take a loan and the money is spent. A central bank like the Fed or any other nation's central bank controls the growth of the money supply indirectly by enforcing reserve requirements on banks and by manipulating the interest rate it charges banks to loan them money. When banks make loans to individuals and businesses and they don't have reserves to cover these loans, they go to their central bank for more, but there is a cost in this reflected in the "discount rate" the central bank charges. If the central bank raises the discount rate, banks curtail loans and this effectively slows the growth of the money supply. The Fed does not "print money" but banks do so every single day. The money supply must grow if an economy is to grow, but the growth must be balanced against economic growth to minimize inflation. This is a judgement call. But, curtail money supply growth too much and you choke off economic growth, maybe even precipitate a deflation. This is where specie fails miserably. There has never been enough gold and silver, with one exception, to grow the money supply to accommodate economic growth. In every case where specie has been used, it has had to be supplemented by a paper currency ( bank loans are effectively paper currency ) to keep the nation in question's economy growing. In any event, whenever the value of the metal a currency is made of exceeds the value stamped on the coin, all those coins quickly disappear and are melted down for their higher value in metal. Coins can be shaved and adulterated as well. This is all well known. Paper currencies do not have such problems. In every case where specie was tried it was soon overtaken by the supplemental paper printed to allow business loans and economic growth. This was true of the Dutch two centuries ago and the US and UK last century. Btw, the US was only on a gold standard for 80 years. We were on a tobacco standard for far longer. I am not advocating a command economy. Where did you get this. Lets examine the equation for national income. GDP = C + I + G + ( Ex - Im ). Income equals the sum of consumption, investment, government spending and the net of exports minus imports. Where is the US in this one year ago. C and I are falling rapidly. Ex - Im has been negative for ages. That means that GDP is falling. The only way to immediately moderate that fall is for the government to spend. Plain and simple. How much and for how long is of course very controversial. I am positing that the US should have intervened not with the banks, but directly at the source of the problem, which at the time was bad home mortgages. We spent trillions with minimal effect in my view, and still face a crisis situation. Were it my decision, I would have put $100 grand directly into each mortgage, or less if less paid off the mortgage. That would have ended the mortgage crisis right there. The rest of the cascading effects would have been squelched. That is not the long term solution, bank regulation is necessary ( and I'm not confident the US will do this, but a return to the post Depression regulations is necessary now, no yesterday ) but doing that would have ended the crisis right away. Now we cannot do that, but there is still a great deal of bad debt coming due, on top of people loosing jobs and not being able to pay their debts. Add to this the fact that millions of US workers in their prime earning years have lost jobs and will most likely never again make anywhere near as much as they did, and we see a nation with vastly diminished purchasing power and loads of bad debt. The banking system will be choked by bad debt for many more years, and this will choke business of the loans they need to stay in businesses. I consider that to be critical. Keep as many businesses in business and keep people in their jobs. I have nothing for the banking or credit industries, but I think the end game may be some sort of mass credit forgiveness. It's not a pretty picture, but I think in time we will come to this. Regarding the Renminbi, I think the market should set it's value in trade. This will allow trade imbalances to adjust seamlessly and completely. There is never any excuse for long term trade imbalances, it is the hallmark of government interference in a smoothly operating market. It always leads to market distortions, distortions that never last and lead to corrections that cause real human misery. Policy counts folks, and real people suffer real pain due to bad policy. Too may so-called leaders forget this little detail. I stand by my statement regarding China. I know many do not agree. Lots of people didn't agree with me two or three years ago when I was harping on the dual deficits. Just like many disagree for my call for floating currencies. Disagree to your heart's content but I smell BS. My critique stands.