What DOES Boehner want to do about China's currency?

[Infohawk]

http://online.wsj.com/article/BT-CO-20111004-709539.html

Despite Boehner's opposition, the Senate currency bill got a boost on Tuesday when Federal Reserve Chairman Ben Bernanke told a joint congressional panel that Beijing's policies may well be hurting the broader global economic recovery.

Appearing before the Joint Economic Committee, Bernanke said the yuan remains significantly undervalued and suggested that by China holding down the value of its currency it was tamping down demand that could help global growth generally.

What is the Republican plan then? China is industrializing at the expense of the US economy. The Republican plan seems to be to wait until the US reaches parity with China which is insane given they are a totalitarian country.

 

[JS80]

China is our slave with their cheap currency. When they stop growing and need to use US dollar reserves, they will take a haircut and take a huge stick up their ass. It will come home to roost for them one day. They will be the ones holding the bag. And we would have already consumed all the stuff they sent us.

 

[Texashiker]

What is the Republican plan then? China is industrializing at the expense of the US economy.

The democrats and republicans both pushed for free trade, its not the blame of one party.

George bush started nafta and gatt, bill clinton signed the treaties, then the senate approved the treaties.

After clinton signed gatt and nafta, king george II and obama could repeal free trade treaties, but neither one has done so.

How does the blame fall on one party in all of that?

China is our slave with their cheap currency. When they stop growing and need to use US dollar reserves, they will take a haircut and take a huge stick up their ass. It will come home to roost for them one day. They will be the ones holding the bag. And we would have already consumed all the stuff they sent us.

How do you figure that? China has the factories, they can sell to the rest of the world. The russian economy continues to improve, all china has to do it sell their cheap products to russia.

 

[Infohawk]

China is our slave with their cheap currency. When they stop growing and need to use US dollar reserves, they will take a haircut and take a huge stick up their ass. It will come home to roost for them one day. They will be the ones holding the bag. And we would have already consumed all the stuff they sent us.

How will they take a haircut by using dollar reserves?

 

[Infohawk]

The democrats and republicans both pushed for free trade, its not the blame of one party.

George bush started nafta and gatt, bill clinton signed the treaties, then the senate approved the treaties.

After clinton signed gatt and nafta, king george II and obama could repeal free trade treaties, but neither one has done so.

How does the blame fall on one party in all of that?

I didn't say it was one party's fault, you just assumed that. I just asked what the Republican plan is on this specific issue. If you read the article, the Democrats seem like they're ready to take some action.

I've said plenty of times on this forum that both parties are responsible for the off-shoring of the American economy. However, I do think that the Democrats may be the first to turn around on the issue.

 

[JS80]

How will they take a haircut by using dollar reserves?

Usually prices of things drop when you have to sell large quantities of it. Right now they are buying US Treasuries at ridiculous premiums with no yield because the Fed is pushing the prices up (and keeping rates down). If the chinamen decide to sell their holdings, prices will drop as hedge funds who find this out will start front running and depress the price. Who knows, maybe the Fed strategy will be the same to try to fuck them.

In the mean time global investors will front run the dumping of the dollar so they get fucked in the ass with two dildos as they get fucked upon conversion.

In the meantime the dollar plummets and foreign trade demand skyrockets pushing demand for US goods. This is the moment we have been waiting for. When this happens the economy will get a huge uptick.

In the meantime China is scared shitless of what I just described. That is why they are perpetuating the shell game and kicking the can down the road. But something's gotta give one of these days...

 

[Texashiker]

I didn't say it was one party's fault, you just assumed that. I just asked what the Republican plan is on this specific issue.

The republicans and democraps plan has always been to ship as many jobs offshore as they can. Nothing has changed there.

The things that have changed, people are seeing the effects of free trade. And I think the people are putting pressure on congress to do something.

The new people voted into congress in the last decade might be seeing what happened in the 1990s is catching up with us. No longer can we give our jobs away without some kind of long term effect to the economy.

When king george I and bill clinton were in office, the public was told free trade would create jobs. Here we are 15 years later and we are about to go into a double dip recession.

What changed from the 1990s to now? I think the people are opening their eyes.

 

[werepossum]

The democrats and republicans both pushed for free trade, its not the blame of one party.

George bush started nafta and gatt, bill clinton signed the treaties, then the senate approved the treaties.

After clinton signed gatt and nafta, king george II and obama could repeal free trade treaties, but neither one has done so.

How does the blame fall on one party in all of that?




How do you figure that? China has the factories, they can sell to the rest of the world. The russian economy continues to improve, all china has to do it sell their cheap products to russia.

True, but the Democrats are usually better.

Or at least the Republicans are worse.

 

[Ausm]

http://online.wsj.com/article/BT-CO-20111004-709539.html



What is the Republican plan then? China is industrializing at the expense of the US economy. The Republican plan seems to be to wait until the US reaches parity with China which is insane given they are a totalitarian country.

The have the same plan they do with Jobs...NONE!

 

[glenn1]

In the meantime the dollar plummets and foreign trade demand skyrockets pushing demand for US goods. This is the moment we have been waiting for. When this happens the economy will get a huge uptick.

Yeah, a huge uptick will ensue with our effectively devalued currency. We can celebrate how our GDP is up 10%, all the while paying double or triple for everything due to the spike up in oil prices that proceed in lockstep with the weakened dollar. Also, you seem to have forgotten that most consumer goods are made in China, and until the dawning of your fantasy world of reinvigorated low-margin manufacturing returning to the U.S. we'll be paying China far more for their goods. But by golly once that glorious day arrives, just think of all the jobs we'll have in such lucrative fields as textiles.

 

[werepossum]

Yeah, a huge uptick will ensue with our effectively devalued currency. We can celebrate how our GDP is up 10%, all the while paying double or triple for everything due to the spike up in oil prices that proceed in lockstep with the weakened dollar. Also, you seem to have forgotten that most consumer goods are made in China, and until the dawning of your fantasy world of reinvigorated low-margin manufacturing returning to the U.S. we'll be paying China far more for their goods. But by golly once that glorious day arrives, just think of all the jobs we'll have in such lucrative fields as textiles.

Agreed. The people who produce the wealth always benefit more than do the people who consume the wealth, unless those people have some control over the producers that allow them to consume the wealth at a discounted rate of exchange. We do not have such a hold on the ChiComs, nor are we likely to ever do so. In a perfect world we would at the least break even; instead we are consuming ever more than we produce and are therefore losing our businesses and real estate to those who consume less than they produce. The most we've been able to do is to use debt to push out the day of reckoning. But in the end, our wealth consumption cannot exceed our wealth production. If we can no longer manufacture products, we'll eventually have to stop consuming them, or at least the majority of us will. There is no free lunch, and a lunch bought on credit doesn't change that fact.

 

[Infohawk]

In the meantime the dollar plummets and foreign trade demand skyrockets pushing demand for US goods. This is the moment we have been waiting for. When this happens the economy will get a huge uptick.

Honestly what do you think the world will look like the day that it's cheaper to produce things in the US than China? The only scenario in which that happens is when China is the more developed, technologically advanced country. At that point we'll be worrying about how to protect our sovereignty and freedom from a more powerful totalitarian country. At best we'd be the new third world as others suggest.

 

[JS80]

Yeah, a huge uptick will ensue with our effectively devalued currency. We can celebrate how our GDP is up 10%, all the while paying double or triple for everything due to the spike up in oil prices that proceed in lockstep with the weakened dollar. Also, you seem to have forgotten that most consumer goods are made in China, and until the dawning of your fantasy world of reinvigorated low-margin manufacturing returning to the U.S. we'll be paying China far more for their goods. But by golly once that glorious day arrives, just think of all the jobs we'll have in such lucrative fields as textiles.

We will shift more to a producer nation vs a consumer nation as the trade deficit gap closes. In the meantime we look for replacements to China in India, Vietnam, etc. The devaluation of the currency to commodity inflation effect will not be as severe as you people claim it will be.

But production gains and real income gains will be real.

You claim I have a fantasy of US taking back manufacturing - if you've ever read my posts I always look down on manufacturing and promote the death of unions and low value manufacturing. Low margin manufacturing will remain overseas - it'll just not be China. In the meantime our high margin highly technical exports will flourish.

 

[JS80]

Honestly what do you think the world will look like the day that it's cheaper to produce things in the US than China? The only scenario in which that happens is when China is the more developed, technologically advanced country. At that point we'll be worrying about how to protect our sovereignty and freedom from a more powerful totalitarian country. At best we'd be the new third world as others suggest.

Cheap low value low technical production goods will shift away from China to a new 3rd world country that wants to be the next China.

Meanwhile our aerospace, agriculture, commodities, chemicals, medical equipment, etc will gain huge boosts.

 

[Infohawk]

Meanwhile our aerospace, agriculture, commodities, chemicals, medical equipment, etc will gain huge boosts.

They're not going to stay here at the rate things are going. Except agriculture maybe, but an agriculture-dominated economy is not where we want to be.

 

[JS80]

They're not going to stay here at the rate things are going. Except agriculture maybe, but an agriculture-dominated economy is not where we want to be.

Sounds like you have an agenda of a closed economy and you're painting the outcome so the result matches a policy reaction to your agenda.

I would recommend taking an International Economics class.

 

[theeedude]

Make it even cheaper, so that "job creators" can create more jobs in China.

 

[Infohawk]

Sounds like you have an agenda of a closed economy and you're painting the outcome so the result matches a policy reaction to your agenda.

I would recommend taking an International Economics class.

Stooping to personal attacks so soon? Okay I'll just assume you don't really have any further arguments.

 

[JS80]

Stooping to personal attacks so soon? Okay I'll just assume you don't really have any further arguments.

How is that a personal attack? My brain told me you like tariffs and protectionism based on my memory of your previous post. International economics explains how trade benefits both parties. I did not insult your intelligence.

 

[rchiu]

How is that a personal attack? My brain told me you like tariffs and protectionism based on my memory of your previous post. International economics explains how trade benefits both parties. I did not insult your intelligence.

Well it will be tough to get him to understand. Anyone with basic international economics knows a country should focus on industries/goods & services they have comparative advantage in.

Been telling him and people like him instead of building barriers and tariffs through protectionism, US should focus on building these specialization and comparative advantages in the industries we want to be good at, that are strategic to us, and we have some competitive edge in, be it inherent or we build through heavy investment.

The problem is US is losing these comparative advantage because of lack in planning, lack in focus on technical/professional education and training, lack of leaders with vision and too many people with entitlement mentality thinking good thing should happen to them because they are American.

With protectionism, you don't solve the basic problem, you just add deadweight losses. Unless US does something to building up comparative advantage in core industries, nothing is gonna change, jobs are not coming back, economy is gonna suck. Nothing is just gonna be handed to you cause you are American.

Any what does Boehner think he can do with RMB anyway. Will Chinese devalue RMB if the US ask nicely? You want to start up some trade war with them at this time when the economic suck bad already? Make imports more expensive? make US companies relying on chinese good and services less competitive?

 

[Dulanic]

Well it will be tough to get him to understand. Anyone with basic international economics knows a country should focus on industries/goods & services they have comparative advantage in.

Been telling him and people like him instead of building barriers and tariffs through protectionism, US should focus on building these specialization and comparative advantages in the industries we want to be good at, that are strategic to us, and we have some competitive edge in, be it inherent or we build through heavy investment.

The problem is US is losing these comparative advantage because of lack in planning, lack in focus on technical/professional education and training, lack of leaders with vision and too many people with entitlement mentality thinking good thing should happen to them because they are American.

With protectionism, you don't solve the basic problem, you just add deadweight losses. Unless US does something to building up comparative advantage in core industries, nothing is gonna change, jobs are not coming back, economy is gonna suck. Nothing is just gonna be handed to you cause you are American.

Any what does Boehner think he can do with RMB anyway. Will Chinese devalue RMB if the US ask nicely? You want to start up some trade war with them at this time when the economic suck bad already? Make imports more expensive? make US companies relying on chinese good and services less competitive?

So answer me this. How would you solve it? How do you train people? Someone who is in their 30's or 40's and used to be in manufacturing... what do they do? Go to college? With no pay coming in to support their family in the mean time? Not to mention college costs many many thousands of dollars. Companies used to train their employee's but that stopped when it became all about the green and be damned with the USA. So what does a person who was in manufacturing do?

You say the USA needs to change it's focus... how? Please, explain how that will be or could be accomplished. It would require spending, which repubs are clearly against. So how? Please, enlighten me.

 

[Macamus Prime]

Funny how some of you scream about communism (that thar black fellar in the wha-et house is a communist!!!) yet bend over and take it when an American business sends everything over to China.

How about you go after the REAL enemies of the USA?

 

[Texashiker]

How about you go after the REAL enemies of the USA?

With free trade, our government sacrificed national security on the alter of profits.

 

[Fallen Kell]

In the meantime our high margin highly technical exports will flourish.

What you mean the same ones that are being out-sourced right and left? Computer design: outsourced to Japan/China/Taiwan/Germany. Computer support: outsourced to India/Ireland. Software development: outsourced to India/Ireland/New Zealand. About the only jobs not being outsourced are CEO's, because they are the ones outsourcing the jobs.... I sure as hell bet there are plenty of qualified people in India or China who would have no problem getting paid 1/200th what current CEO's receive and do the same job, and probably better (at least China is looking 10-20 years ahead which is what we should be doing, but instead we are not even looking past the next quarter!).

 

[bfdd]

We need those low paying manufacturing jobs here and we need Americans to take them. Through taxation and social services the bottom can be lifted up from help of us all so they can have things like health care and what not. I keep hearing people say we need to float the bottom, but they want the bottom to become like the middle/top and that's not going to happen. We need people from top to bottom, all walks of life, being a cog in a well oiled machine is better than being a wrench.