The numbers don't lie

[The-Noid]

You are leaving out the fact that Americans would also be making infinitely more money for the economy than they would on welfare or unemployment for 3 years.

I don't debate politics, there are thousands of studies on both sides proving and disproving the economic benefits of outsourcing.

However, it is not only a labor issue it is a regulation issue as well, that is my point.

 

[LegendKiller]

Its labor and regulation arbitrage. The sheer fact of the matter is that we have setup factories and other industry that would not meet many US pollution and other regulation. Moving many of these jobs back to the USA would not only cause an increase in cost via the labor rate but also the increase regulatory cost so you are getting hit on two ends.

The Renminbi:American Dollar appreciation will only help on a labor or PPP problem it isn't going to help on a regulatory exchange problem.

To move jobs back to the USA we need both appreciation of the Chinese currency and a simultaneous increase in pollution and regulation in China or a decrease in our pollution and regulatory stance.

Going to China is something that most Americans can't even understand. No matter how much you hear it the pollution is SO much worse than anything you can imagine.

The cost of doing business includes all of that, so using a RMNB exchange rate 30-40% higher than current would likely erase all, or nearly all, of the advantage of the labor/regulation arbitrage. Once you include transportation costs and bad-will from China, your arb is gone. It would also, very likely, get close to eliminating our deficit (with some cuts, of course), as the tax revenues, not just from individuals but corporations, would skyrocket.

All other Asian economies are trying to devalue relative to the dollar to keep the arbitrage in place. The fact of the matter is that China is fucking with the global economy to bootstrap their shithole up to a 1st world country. They feel that it is their destiny to be superior to the west and that the west only "got there first", in their minds. Now they'll do whatever they can to catch up.

Personally, I would vote for the first President who would label them, unequivocally, a currency manipulator and do something about it, regardless of their affiliation or other issues. This is the single largest issue we have, without a doubt.

Until that time I fully advocate the Fed having QE2-X to keep exporting the inflation. If they don't want to play the game, be prepared to get fucked by hyperinflation, because without their currency floating, any inflation affects here are multiples worse there.

Saw this earlier this week, it's a good read and pretty much spot on.

http://dealbreaker.com/2011/02/paul...ss-in-the-us-manufacturing-sector/#more-36869

 

[Fern]

-snip-
Personally, I would vote for the first President who would label them, unequivocally, a currency manipulator and do something about it, regardless of their affiliation or other issues. This is the single largest issue we have, without a doubt.

Well then, send your campaign contributions to Donald Trump. China's currency manipulation looks like his #1 issue.

Fern

 

[The-Noid]

The cost of doing business includes all of that, so using a RMNB exchange rate 30-40% higher than current would likely erase all, or nearly all, of the advantage of the labor/regulation arbitrage. Once you include transportation costs and bad-will from China, your arb is gone. It would also, very likely, get close to eliminating our deficit (with some cuts, of course), as the tax revenues, not just from individuals but corporations, would skyrocket.

All other Asian economies are trying to devalue relative to the dollar to keep the arbitrage in place. The fact of the matter is that China is fucking with the global economy to bootstrap their shithole up to a 1st world country. They feel that it is their destiny to be superior to the west and that the west only "got there first", in their minds. Now they'll do whatever they can to catch up.

Personally, I would vote for the first President who would label them, unequivocally, a currency manipulator and do something about it, regardless of their affiliation or other issues. This is the single largest issue we have, without a doubt.

Until that time I fully advocate the Fed having QE2-X to keep exporting the inflation. If they don't want to play the game, be prepared to get fucked by hyperinflation, because without their currency floating, any inflation affects here are multiples worse there.

Saw this earlier this week, it's a good read and pretty much spot on.

http://dealbreaker.com/2011/02/paul...ss-in-the-us-manufacturing-sector/#more-36869

40% seems to be the most talked about number as of late and also exactly what the Big Mac survey has been predicting for three years.

Funny that a goofy survey by the Economist is the most unbiased predictor of future exchange rates.

I am actually shocked how big of stones Geithner has gotten against the Chinese.

And obviously to your point.
M2 has to grow, to keep the currency peg in place. M2 in China > M2 in USA .
PBOC:

By the end of January 2010, the balance of broad money supply (M2) in China was RMB 62.51 trillion ($9.15 trillion), a year-on-year increase of 25.98 percent but a decrease of 1.7 percent compared with the end of last year. Narrow money supply (M1) in China at the end of January stood at RMB 22.96 trillion ($3.36 trillion), indicating an increase of 38.96 percent year on year, while money in circulation (M0) was down by 0.79 percent year on year to RMB 4.08 trillion ($596.95 billion), with net cash flow in the month in question at RMB 251.2 billion, down by RMB 425.2 billion ($36.75 billion) year on year.

At the end of January, RMB loans of Chinese financial institutions stood at RMB 41.37 trillion ($6.05 trillion), a year-on-year increase of 29.31 percent, with the growth rate down by 2.43 percent compared with the end of 2009.

 

[Engineer]

You are leaving out the fact that Americans would also be making infinitely more money for the economy than they would on welfare or unemployment for 3 years.

and the fact that shipping from China isn't free. May not cost huge amounts but it isn't free, not to mention the shipping across the country once it gets here.

 

[Engineer]

Well then, send your campaign contributions to Donald Trump. China's currency manipulation looks like his #1 issue.

Fern

Really? If Trump is the next Ross Perot, he will have my vote in 2012 (assuming he is on the ballot).

 

[ElFenix]

If it were a cherry picked date, the point is not invalidated. The changes are still there - they just might be slightly larger with that date than another. You don't get that.

But it's not a cherry picked date, in that it's the last year before Regan was elected, even if the numbers make it a little bit of a more equal wealth pick.

Say you are pointing out that 10.1, 10.3, 9.8, 10.1, 10.6 went to 16.1, 17.9, 16.2, 18.0.

Is the fact that you pick 9.8 instead of 10.1 somethig that disproves the point?

9.3 is much closer to the trend that you've put there than the late 70s were. iirc, it'd be closer to 7 for the trend that you proposed. again, the post is around here somewhere with the numbers and the cites in it. just can't remember search terms.


edit: found the data point i was thinking about, it's 1976. top 1% share of wealth had decreased by 1/3 compared to the average of 1962-1972. that's what you call an outlier. trying to find 1979.
http://books.google.com/books?id=Fp...q=wealth distribution in america 1975&f=false

 

[BoberFett]

Until that time I fully advocate the Fed having QE2-X to keep exporting the inflation. If they don't want to play the game, be prepared to get fucked by hyperinflation, because without their currency floating, any inflation affects here are multiples worse there.

Did everyone else just see LK threaten hyperinflation?

 

[werepossum]

The cost of doing business includes all of that, so using a RMNB exchange rate 30-40% higher than current would likely erase all, or nearly all, of the advantage of the labor/regulation arbitrage. Once you include transportation costs and bad-will from China, your arb is gone. It would also, very likely, get close to eliminating our deficit (with some cuts, of course), as the tax revenues, not just from individuals but corporations, would skyrocket.

All other Asian economies are trying to devalue relative to the dollar to keep the arbitrage in place. The fact of the matter is that China is fucking with the global economy to bootstrap their shithole up to a 1st world country. They feel that it is their destiny to be superior to the west and that the west only "got there first", in their minds. Now they'll do whatever they can to catch up.

Personally, I would vote for the first President who would label them, unequivocally, a currency manipulator and do something about it, regardless of their affiliation or other issues. This is the single largest issue we have, without a doubt.

Until that time I fully advocate the Fed having QE2-X to keep exporting the inflation. If they don't want to play the game, be prepared to get fucked by hyperinflation, because without their currency floating, any inflation affects here are multiples worse there.

Saw this earlier this week, it's a good read and pretty much spot on.

http://dealbreaker.com/2011/02/paul...ss-in-the-us-manufacturing-sector/#more-36869

http://www.worldsalaries.org/china.shtml
Raising the exchange rate will not even make a wart on the ass of China's competitive advantage. These are 2005 wage rates, but when monthly compensation averages $1,076 for an engineer and $586 for the entire manufacturing sector.

If I recall correctly, China's next five year plan (beginning this spring) includes shifting significant portions of its exporting power toward internal consumption, both for raising living standards and to provide some elasticity in manufacturing demand. So China may begin to allow the yuan to appreciate against the dollar. Alternately, it might also keep the yuan week to discourage Chinese citizens from importing foreign goods and encourage domestic consumption.

 

[Engineer]

Alternately, it might also keep t...hat anything would change in the near future.