The Economist Whose Contrarian Streak Has Gotten Attention in Biden and Trump Ca

[ltlee1]

"Michael Pettis, a professor of finance at Peking University, has spent
two decades in China observing its breakneck economic ascent and its
impact around the world. Among his conclusions: He thinks former
President Trump’s plan for across-the-board import tariffs isn’t a bad
idea. He also says the U.S. should use capital controls to discourage
China and other high-saving nations from snapping up treasuries, stocks
and other American assets.

Those views make the 66-year-old Pettis perhaps the world’s foremost
punk-rock economist, embodying in his theories the same counterculture,
do-it-yourself and antiestablishment ethos that he cultivated as a music
club and record-label owner in New York and Beijing.

His ideas are at odds with mainstream economists, who say such policies
would push up inflation and interest rates and cripple the U.S. economy.
He has a devoted following that includes some of the figures shaping
recent U.S. economic policy, including people inside the Biden
administration and advisers to Trump. "

https://www.wsj.com/economy/trade/the-economist-whose-contrarian-streak-has-gotten-attention-in-biden-and-trump-camps-edc6af77

[ltlee1]

”He also says the U.S. should use capital controls to discourage
China and other high-saving nations from snapping up treasuries, stocks
and other American assets.
..
His ideas are at odds with mainstream economists, who say such policies
would push up inflation and interest rates and cripple the U.S.
economy.“

Given that the US currently runs large fiscal and trade deficit, it
needs foreign entities mainly China and other high-saving nations to
snap up US treasuries and dollar denominated assets. Why do any foreign
entities want to hold treasuries and other dollar assets?

1. For international trade
2. For low risk interest income such as US government and
semi-government papers.
3. For high risk speculative income/gain.

Is it really better for the US as well as the world if China and other
high saving nations do not buy US treasuries which is safe and
concentrate on speculative assets?