The Market "Correction"
Inasmuch as I have publicly predicted that the trade deficits (and relations with China in general) are no big deal, I should probably comment on yesterday's large movements. Contrary to what my critics (who roost around the mises.org blog) may think, what happened yesterday has little relevance to my ongoing critique of people like Paul Craig Roberts and Peter Schiff. In particular, each of my 3 predictions (no recession in '07, oil under $50 by Christmas, and dollar stronger against euro by year's end) could still come true. But there's more than that. What exactly happened yesterday? Well, the conventional story (and I have no reason to doubt it) says that the Chinese stock market tanked because on Sunday, the Chinese gov't said it would crack down on stock "speculation" and might impose capital gains taxes on their unconscionable profits. So is this cause-and-effect--namely, gov't threatens to tax and regulate, and this lowers asset values--due...