Paul Krugman | The "American Hooliganism" on Which China and Russia Rely

Paul Krugman, Krugman & Co.: "The funny thing is that Russia, like other emerging markets, is suffering from inflation precisely because it doesn't want to let the United States reduce its trade deficit. Capital wants to flow to the emerging markets, with the counterpart of that flow being a move on their part into trade deficit, while the United States reduces its trade deficit. But the necessary counterpart of that move is a real appreciation on the part of the emerging markets - a rise in the relative prices of their goods and services. They could let their currencies rise; if they won't, the real appreciation will take place via inflation, which is what is happening. What's really weird, of course, is the large number of analysts in the United States who are taking the side of China and Russia in this business. Why do they hate America?"
Read the Article