Blame China

There is a blame game ongoing in the political scene right now. First of all, I don't think I belong to what we could describe as the worst of the lunatic fringe; on the contrary, I believe to be sane and rational. We are blaming the yuan for the trade deficits of some countries, but the fact is the yuan has little to do with the current imbalances. Even if China decided to revalue the yuan, the trade deficit would still remain high. However, the likelihood that China would stand by and let us set the rules of the game is very slim, for which there would only be a winner. There are many reasons why we in the developed world incur large trade deficits. One would be that domestic consumption has not kept pace with industrial output. With a deep-rooted aversion to debt and salaries way below ours, it is only natural that China ends up becoming our banker. Now, some people have said that Chinese policymakers deliberately keep the exchange rate low to inhibit consumer spending, but that is quite far-fetched. Being a developing country, you would expect they keep rates low to promote private investment so they can, you know, build roads and everything, the usual stuff. And if they would significantly raise interest rates right now, it would spell trouble for many banks, which have bad loans on their balance sheets. We can't realistically expect that China would open the floodgate and let its financial system collapse from all the liquidity that would flow out of the United States either.

reply to post by bulgogi





So intentionally keeping your currency worthless so your people are imprisoned within the system should go blameless?


The reality is America and the rest of the world are trying to what China has already done. Soon we will have nice camps to go and work in. Maybe we can leave once or twice a month to visit with family. And most of our paychecks can go right back to the company for food and shelter.



I bet I am wrong and everything will be rainbows and butterflies.

reply to post by bulgogi



Scratches under his foil hat....
For someone who is trying to sound as if they are speaking for "WE" it comes off as a poor attempt at Reverse psychology. You seem to me "and I could be wrong" attempting to justify China's actions while trying very hard to portray yourself as being a westerner or at least living in the west.

ON TOPIC>>>>

Then if that is all true.
Why wouldn't China just show how strong their Currency really is and let it float?

reply to post by SLAYER69


I would love to see that. You would have alot of Chinese millionaires over night. But it would be short lasted as all the goods they sell would be worthless.



I think this thread is misguided at best.

Originally posted by SLAYER69
reply to post by bulgogi

 

Scratches under his foil hat....
For someone who is trying to sound as if they are speaking for "WE" it comes off as a poor attempt at Reverse psychology. You seem to me "and I could be wrong" attempting to justify China's actions while trying very hard to portray yourself as being a westerner or at least living in the west.

ON TOPIC>>>>

Then if that is all true.
Why wouldn't China just show how strong their Currency really is and let it float?

edit on 24-12-2010 by SLAYER69 because: (no reason given)

Past experiences have shown that hot money inflows tend to destabilize the financial market during its infancy, and the market, being irrational, often sees value where there is not any leading to unsustainable prices and a subsequent collapse in price.

Originally posted by bulgogi
Past experiences have shown that hot money inflows tend to destabilize the financial market during its infancy, and the market, being irrational, often sees value where there is not any leading to unsustainable prices and a subsequent collapse in price.

Markets being irrational.........
Could an artificially high currency be a contributing factor?

China and Russia agreed recently to trade in their respective currencies hopefully this will continue. This is one way of getting China's currency out in the real world. Time will tell. If China is as you say. Then there shouldnt be a need for these artificial levels.

Wouldnt you agree.

Ever heard of real estate bubbles? We've experienced them. Hows all those bad internal loans and empty square footage going I wonder. All that glitters isn't always gold.

You obviously have no idea what you are talking about.

reply to post by bulgogi


Could you point out a few examples in history or the present to back up what you are saying. Heck, I would take a single example I am tired and want to go to bed.

Originally posted by bulgogi
You obviously have no idea what you are talking about.

Well since you did not target anyone with this rebuttal I will be left to assume it was inter-reflective. If you were referring to my buddy Slayer you would be wrong.

Originally posted by bulgogi
You obviously have no idea what you are talking about.

Here is an interesting perspective.....

The China Files (Special Project): Real Estate

All of these factors contribute to the burgeoning real estate bubble - and make it difficult to predict when that bubble will burst. With 70 percent of real estate investment in China coming from bank loans, a dramatic drop in land values could send shock waves throughout the economy. There are already signs of decline. In Shenzhen, one of China's first-tier cities, real estate prices have been dropping for the past two years (30 percent for housing), and many developers and speculators have suffered great losses. The threat looms in other large cities such as Beijing and Shanghai and may be emerging in many second-tier cities as well.

Given the current global economy and the economic balancing act it must maintain domestically, Beijing has few good choices. It must keep enough cash flowing to maintain economic growth and social stability in the short term while tightening credit to avoid a tsunami of bad loans and a market collapse over the long term. Certainly, Beijing does not want to face the kind of collapse in the housing market that Japan experienced in the 1990s, which triggered a financial crisis and more than a decade of economic malaise.

But in China's real estate, as in most sectors of this vast and complex land, implementing and enforcing prudent regulation has never been an easy task

OP, I'm definitely from America, and I see exactly what you are saying. The trade deficit with China is low because we, as Americans, decided several years ago to support private corporations that sold inexpensive foreign-made products rather than American made. China, however, did not return the favor.

This is not the fault of China. The lack of tariffs on foreign made products and the outsourcing of American jobs for the increase in corporate profit margins are partly to blame. It can also not be blamed on the Chinese artificial fluctuation of currency either, as almost all central banking systems (Federal Reserve) do this to some extent.

The blame needs to be put squarely on the systems that created the problems, and that is, mostly, American consumerism. There is simply no rational basis for blaming our economic woes on China.

reply to post by nwdogg1982


I see your point and it is well thought out. But the fact remains they manipulate their currency and this is not a myth. It is all part of the plan to devalue everything we have. They are just playing a part in a bigger picture. Soon the rest of the world will look alot like China they have made a pretty good model for the TPTB to follow.

reply to post by Subjective Truth


Absolutely. Everyone knows that China adjusts it's currency artificially. The problem is when it is presented in a hypocritical way, by politicians, by not acknowledging that our own Federal Reserve is doing the same thing right now. And I wouldn't be surprised if the EU was doing the same thing. The central banking systems control the world right now.

I would question though if they are all working together, or if they are each playing their own part in the "great game." I don't really know.

reply to post by bulgogi


All around the world countries are suffering the same problem. A monetary readjustment to a single global currency must occur if we are to keep it all together. This is a very complex and political procedure and will take some time to work out all the details (3 - 12 months estimation). Greed has been a reason behind this, but there are many others. We all need to work together if we are correctly understand the problems and work through them together. Here is a link to help understand some of the global money problems.

www.bibliotecapleyades.net...

reply to post by kwakakev


China will be facing a fairly ugly problem though if they keep going down the road they are IMO. Eventually all those millions of workers [who the vast majority are working for Foreign companies] in China manufacturing products sold abroad will want a higher standard of living with REAL buying power. Now there will come a point relatively soon where China wont be able to supply both the world with a Cheap labor force AND give their people real buying power and supply them with a standard of living on par with many western countries with their massive internal demand.

This is where countries like India with it's much younger and [sex-balanced population demographics] come into play.

The western manufacturers will eventually start to [body shop / laborers] outside of China as China's population becomes more consumer oriented wanting to spend some of their hard earned wealth. The cycle continues. This is one major reason why foreign companies flocked to China in the first place. Cheap labor during their massive growth cycle. By manufacturing inexpensive products sold abroad for massive profits. Then later they have in place a manufacturing base to supply the internal demand by it's growing middle class for products and services. If China does not start letting their currency float it in the long run will actually cost them more. But they don't see it that way. They want to be the tail that wagged the dog. It wont happen. Don't think so?

GREED for profits. The very large multinationals will just move on down the road to the next hot bed of cheap labor.

It's like pulling off a band-aid, do it all at once and get it over with or do it slowly and enjoy the pain.

China as No. 2: Why Its Days as a Manufacturing Outsourcer Are Numbered

Most importantly, China is home to an enormous amount of outsourced manufacturing. The balance of trade with developed countries is almost always in its favor, and the incessant hum of production has guaranteed a flow of foreign currency and buying power. However, prosperity has its price, and China’s will be greater demand by citizens for better lives — and a growing inability to satisfy Western companies that want to save some money on labor. It’s an inevitable cycle, and corporations have consider how the face of manufacturing will change over the next ten years just as thoroughly as it did two decades ago.

This shift has been in process for 30 years. China exports more than Germany, much of that in the form of good produced in factories on behalf of Western countries. Much of the population is still poor, but labor and material prices are on the rise in China. It makes sense, as domestic growth must compete for the same physical and people resources.

However, they’re also on the rise throughout other parts of Asia, including Indonesia, Vietnam, and Bangladesh. What we now see is the beginning of a shift of economic conditions. For a short period of time, companies could become manufacturing nomads, moving from one country to another in search of low costs. Eventually, however, you run out of new territories.

What most people don't seem to understand is the Same people who own the Federal Reserve also own and issue the currency for most other countries in the world including China. So all this back and forth with currencies is their game with thier agenda to suck the wealth of nations into thier own coffers and they do it very well and have been for centuries. With the masses thinking it this country or that country etc. They have started every war since the Revolutionary war to this end so they are ruthless. If some country doesn't comply they will start a war to force it to comply.

Permit me to issue and control the money of a nation, and I care not who makes its laws. Mayer Amschel Rothschild