It would be hard for an expatriate not to love a book whose first line is
It should be against the law to mock someone who tries his luck in a foreign language.
So begins Budapest, by Chico Barque, delightful in English translation from the Brazilian Portuguese about an invisible man of letters who falls in love with the Hungarian language.
This is a book of exuberant words, and its exuberance is catchy. It’s a small book, a short read, a few clever twists, but mostly it is just an explosion of words describing less life than imagination.
Time spent as an expatriate can sap your inner voice. Even as one learns a new tongue, one cannot help but be hesitant to use it. After all, it is not against the law to mock stilted foreigners. Even among impeccably polite hosts, one is constantly aware that whatever beyond mere practicality one wishes to express will be hopelessly marred. Your sense of humor will be misinterpreted, your irony will not be caught, your puns will be unintentionally obscene. People will laugh, or be offended, or they will be confused. You may be cute, but you will not be yourself, who you mean to be. If you are not careful, with each phrase misspoken you become something small in your own eyes, a curiosity.
This book I am hawking (I suppose I am hawking it, since I just signed up for Amazon’s affiliate program in a what-the-hell kind of a moment) doesn’t dwell on all of this. It doesn’t dwell on much of anything. It runs rough-shod over any actual topic with the self-indulgent imaginings and ego-fueled explosions of its protagonist, and the plot of the book ends up seeming like an interesting enough travelogue, or like a cute joke, but you don’t much care. This is a book whose purpose is to sweep you away in a torrent of words, and for that I am grateful. It is a book for an expatriate to savor, not primarily because what it describes is topical, but because it is an antidote to the mute colorlessness that threatens to quietly overtake the mind of the shy, unwary alien.
I originally posted this story to the very nice bitsofnews.com. I’ll try to write for them regularly, and will cross-post my contributions here.
China gets a lot of attention for its policy of keeping its currency cheap with respect to other countries’ money largely by printing local cash to buy up foreign exchange. Usually when countries ramp up the printing press in support of some state policy or another, the result is high inflation. Not so in China, which — so far — has been expanding its money supply at a heady clip with only very moderate inflation. But perhaps this story in today’s New York Times is the canary in the coal mine?
Noodle Prices Rise, Along With Chinese Tempers
…So in February, as noodle patrons across the city arrived for their morning fix, an unexpected notice awaited them: The price of a bowl of Lanzhou pulled beef noodles was going up. A large bowl, once only 27 cents, would now cost almost 31 cents… “Beef Noodle Price Hike Touches Off Nerves Everywhere!” declared The Western Economic Daily, a feisty local paper.
But, wait a minute, not so fast…
Read a bit further and you’ll find that rather than being a story about incipient hyperinflation in China, the real story here is just how hard it is to raise prices in the new wild East of capitalism. To manage a 15% price increase in the price of noodles required a campaign of organized intimidation on the part of noodle-sellers unhappy with their margins.
“They came over and handed this to me,” said Mr. Ma, showing a two-page agreement that called for every shop owner to raise prices. “They said, ‘If you don’t raise your prices, we’re going to tear down your shop sign.’”
And still, given China’s hypercompetitive environment and increasing supply of noodle-sellers, the price increase seems unlikely to stick.
[Noodle-seller Zhang Wei] got a visit from the noodle cartel, and his wife even signed an oath with a thumbprint, pledging to raise prices. But after Mr. Zhang saw the newspaper coverage, he returned his prices to the lower rate. “I had a lot fewer customers after I raised the prices,” he said.
The market for noodles in Lanzhou is hardly the city of London in moving the global economy. But for economists amazed that China’s booming money supply seems to exact none of the traditional costs of an overhappy printing press, the Yellow River noodle-sellers tell the tale.
And for all those Western workers and businesses trembling in the face of Chinese competition, here’s a healthy reminder that the only thing worse than being a foreigner and having to compete with the Chinese is being Chinese and having to compete with the Chinese.
What is money? Much more on that soon, it gets to the heart of what I am thinking about these days, and what I hope to write about on these pages. I think we’re about to have something of a crisis with respect to the meaning of money, and that the resolution of this should not be old bromides like the gold standard, but something completely different.
In the meantime, on Brad Setser’s wonderful blog of which I’m a breathless groupie, regular commenters HZ and DF touched upon the question. I wrote a long response, then decided it wasn’t really appropriate to Brad’s comments, as my response was long and has nothing to do with Brad’s main post. So, I’ll put my mini-essay here, as a teaser for the much more that is to come on the subject.
In the comments to this post, HZ asked of Dr. Setser…
Since total money is equal to consumer borrowing + government borrowing + corporate borrowing + foreign borrowing, I have two questions:
A. Do you see total money supply too high?
B. If not, and since we want consumer borrowing and government borrowing to go down, to avoid deflation which one do you want to see step up borrowing? Foreigners?
DF responded with…
In fact I don’t agree with “total money is equal to consumer borrowing + government borrowing + corporate borrowing + foreign borrowing” Bills and coins are not related to any kind of borrowing.
…which kind of set me off. Here’s my response, what I think about the relationship between debt and money, without getting into rather poor formalisms like M1, M2 and M3.
DF — Money is always debt. At a very fundamental level, that is what money means. To hold money, whether as numbers in a bank or bills in hand, means that somebody, somewhere owes you something. The genius of money is that rather than anyone in particular owing you something when you hold your 10 euro bill, you can think of it as simply being “owed” 10 euros worth of goods and services. But there is a counterparty even in holding the 10 euro bill. The ECB is in your debt, but it is in your debt under terms that are very unfavorable to you. You cannot force redemption for any normal good or service, and they won’t pay any kind of interest. But they will guarantee the service of offsetting 10 euros worth of taxation by any euro member government in exchange for surrendering that bill. Fundamentally, fiat currency represents debt by a government or governments to offset some confiscation or compulsion they might otherwise subject you to. Even those not subject to taxation find state tender valuable, for the goods and services they can acquire from citizens who do require an offset to taxation. States proclaim this form of very advantageous (to them) debt to be the legal medium of exchange, and have for the moment succeeded quite well at making it so. I sound like some nutcase gold bug putting things into these terms — for the record I don’t believe in a gold standard or anything similar — but in conceptual terms, and on the balance sheets of central banks and governments, those coins in your pocket are in fact debt.
HZ — All money may be debt, but not all debt is money. The line is blurry, but to be money in a money supply sense, debt has to have some likelihood of being used as a medium of exchange. A bank’s debt to you in a checking account is close to money, because you ordinarily might make exchanges by giving that claim on your bank to someone else (with a debit card, or via the quick intermediation of ATMs or credit cards). But the bonds held by PBoC are very far from money. If PBoC were simply to “burn the certificates” on 100 billion USD of the Treasury’s debt to it, there would be no meaningful effect on the supply of money that actually participates in exchange, so it would not be deflationary. Wanting debt to disappear is not necessarily the same as wanting money to disappear. If PBoC would simply forgive the US debt represented by its reserves, that would be a straightforward positive for the US economy. Heck, it’d be downright inflationary, as Americans would take it as license to take on more debt, of a more money-supply participating sort.
All that money PBoC is holding is potentially inflationary, if China were to go on a spending spree. But that is just another way of saying that the value of the dollar would tank if PBoC decided to divest itself of dollars, which everyone who’s ever read Brad’s stuff knows very, very well.
In Baltimore, it’s morning, but I’m not in Baltimore. It’s 1:30 pm here in Constanta, at the edge of darkness, or at least the Black Sea, and I having a lazy beginning to a day which, after all, still has an agenda. My finacée, R—, has not been feeling well. We stayed in bed together this morning, and after a while we both felt better. There are consolations to this gypsy’s life I’ve made for myself.
But it gets to me, it always gets to me, and I must go and try to hawk my family’s “villa”. Somewhere, there must be the perfect trading company or somesuch that would love to make a home of the finest office space in Constanta, at the very heart of the city with original hardwood floors and spectacular views of the beach. My charge has remained vacant 5 months, and I am embarrassed. Oh, dear reader, you wouldn’t happen to be a multinational businessperson expanding into Central Europe? Oh well. I thought not.
To the realtors’ offices then, to put a fire under all their asses. I am one to talk, here in bed and it’s going on 2 pm, but I have no great impression of the work ethic of the Constantan realtor. Of course they preen with the status symbols of the age, the long, dark coats and gleaming silver mobile phones, but it seems to me they put up ads and wait for phone calls, and atata tot — that’s all. It’s not enough, of course. So I will make myself much pushier.
R— is in the bathroom, primping and powdering herself in long rituals. She will never be persuaded, though I have tried, I have, that all this work is entirely unnecessary. So I wait my turn, to use the can, take a quick shower, then off we go, to lunch, to the realtors.
When I was a child, I was told that I was a good writer. That always seemed to me like a mixed blessing, because writing is something that mostly I did out of obligation, for school or for some other purpose. There were those times when I wrote because I wished to write. But those were usually times when something was wrong.
Interfluidity is born at a moment where I feel a spontaneous desire, perhaps even some desperation, to write. Now as it was always, I am provoked into writing because something is wrong.
Something is not flowing. Something is blocked. At one level, this is something akin to writers’ block. But it is goes beyond that, because it was never my ambition to be a writer, exactly. At a broad level, I feel I have something to contribute, there is something that I’m supposed to do or have done, and I’ve not succeeded in doing it. Interfluidity is my attempt somehow to flow, to get all the things I am thinking and trying out there, even on a page made of electrons and other peoples’ eyes.
I’m skeptical of myself these days. My recent track record has not been one of success. There are a thousand projects started and never quite completed. (This is my second blog, here’s
the first.) I’ve taken foolish risks financially, and therefore foolish losses. I’ve tried, so far without success, to reintegrate myself into the academic world. I’m feeling closed-in, stuck, at a loss. So here’s a new page, upon which I will try yet again to flow.
I am not a humble person. There are things I have to contribute that could really matter, that could be revolutionary even. But so long as it all remains closed-up in the hollow cavity of my skull, who gives a shit? Interfluidity.
This is a placeholder, some words, forgettable, regrettable, as I’ve nothing to do or to say but to try to get the look right, the graphics up, all that jazz.
But it is also I suppose a new beginning, to something, a forgetting of escapades and failures past, a clean path to new misadventures. Let’s see where it goes.