 |
| |
|
|
Tingkai
|
|
To find the Northwest Passage
Aug 2001
time: 13:33
|
|
quote:
Originally posted by Kidicious
No, importing goods costs jobs, as well as dollars. That's my comment. |
Yes, if you import goods you have to pay for them so in that sense imports cost dollars. And if Chinese company can sell a widget for US$1 while an American company sells it for US$10 then the American company will close and jobs will be lost.
But there is more to the story then that.
The widget buyer now saves $9 by buying the Chinese widget. The buyer could decide to spend the money on consumption, for example a meal at a restaurant. That creates new jobs.
Or the buyer invests the savings. Again that creates new jobs.
Also, the American widget maker, knowing that it can't make competitively priced widgets, might start producing high-tech gadgets that China cannot produce. In this case, no jobs are lost, more or less.
The simple fact is that cheap Chinese imports greatly benefit the American economy.
Last edited by Tingkai on 18-02-2004 at 13:20
|
|
| |
|
|
|
Tingkai
|
|
To find the Northwest Passage
Aug 2001
time: 13:33
|
|
quote:
Originally posted by Kidicious
The deficit could be much larger and the Fed could raise interest rates and cause the dollar to strengthen. . |
While that is theoretically possible in the short run, in the long run, higher interest rates and a large government deficit leads to a lower dollar.
Higher interest rates:
- increase the cost of borrowing money to finance the deficit, thereby increasing the deficit which further weakens the dollar.
- slows down the economy, leading to loss jobs, small profits, and lower tax revenues, all of which increases the government debt. Again, this puts downward pressure on the dollar.
The slowing economy also puts downward pressure on the dollar as does the uncertainty created by the larger deficits.
|
|
| |
|
| |
|
|
|
CharlesBHoff
|
|
el paso texas
May 2002
time: 05:33
|
|
quote:
Originally posted by Ben Kenobi
That's not bad. Something for other countries to consider with abysmal birthrates. Like Canada. |
It isnot working yet. The Jap culture treat the woman worst than the Islamist culture does. Than son wife is the slave of his mother, the wife has no life apart from fer hushand and family. There are Japnese woman in their late 30 and early 40's who donot want childern or be marry, if marry they either have thenself serlize or have aroblation.
|
|
| |
|
|
|
Whoha
|
 |
The TOC is supposed to be classified guys...
Dec 2001
time: 23:33
|
|
quote:
Originally posted by Tingkai
Yes, if you import goods you have to pay for them so in that sense imports cost dollars. And if Chinese company can sell a widget for US$1 while an American company sells it for US$10 then the American company will close and jobs will be lost.
But there is more to the story then that.
The widget buyer now saves $9 by buying the Chinese widget. The buyer could decide to spend the money on consumption, for example a meal at a restaurant. That creates new jobs.
Or the buyer invests the savings. Again that creates new jobs.
Also, the American widget maker, knowing that it can't make competitively priced widgets, might start producing high-tech gadgets that China cannot produce. In this case, no jobs are lost, more or less.
The simple fact is that cheap Chinese imports greatly benefit the American economy. |
why do you make the false assumption that high paid American workers, and high spending American consumers are two completely independent entities? You also go on to assume that the Widget Maker will drop everything and retrain all his workers, and jump through 8 or 9 hoops to shift over to high tech work that the Chinese can't do,unfortunately this is another false assumption. Go to any tech store and count how much of everything in there says "Made In China", High tech imports from China are going up alot.
|
|
| |
|
| |
|
|
|
Tingkai
|
|
To find the Northwest Passage
Aug 2001
time: 13:33
|
|
quote:
Originally posted by Whoha
why do you make the false assumption that high paid American workers, and high spending American consumers are two completely independent entities?
|
I never said that the two are completely independent.
However, you seem to assume that all US manufacturing jobs pay a high wage. That is a false. While some people in the manufacturing sector, such as autoworkers or people working for Boeing, make high wages, many factory workers make minimum wage, particularly at companies that make low-tech items.
Also, US manufacturing wages have declined since the 1970s, well before foreign companies began operating in China.
quote:
Originally posted by Whoha
You also go on to assume that the Widget Maker will drop everything and retrain all his workers, and jump through 8 or 9 hoops to shift over to high tech work that the Chinese can't do, unfortunately this is another false assumption.
|
No, I said the company might switch to a high tech product.
Yes, changing production lines is not easy, but in the overall picture, it happens all the time.
quote:
Originally posted by Whoha
Go to any tech store and count how much of everything in there says "Made In China", High tech imports from China are going up alot. |
The point is not whether these products are made in China, but whether American firms can compete.
With low-tech items, American companies have an extreme disadvantage. Chinese workers are earning a dollar a day. Trying to compete directly with these low wages is pointless.
But there are many areas where American companies can gain an advantage through higher productivity and quality.
For example, golf clubs are often made in China, but assembled and fine-tuned in the US because of the skill required for these processes. Or for a real-life example, I can buy high-quality, made-in-Canada hockey goalie pads for US$1,000 or low quality, made-in-China pads for $500.
|
|
| |
|
|
|
Kidicious
|
 |
Diety of Kidiverse
Mar 2003
time: 21:33
|
|
quote:
Originally posted by Tingkai
While that is theoretically possible in the short run, in the long run, higher interest rates and a large government deficit leads to a lower dollar.
Higher interest rates:
- increase the cost of borrowing money to finance the deficit, thereby increasing the deficit which further weakens the dollar.
|
Higher interest rates actually strengthen the currency. It's the low interest rates that discourage investment in bonds.
quote:
Originally posted by Tingkai
- slows down the economy, leading to loss jobs, small profits, and lower tax revenues, all of which increases the government debt. Again, this puts downward pressure on the dollar.
The slowing economy also puts downward pressure on the dollar as does the uncertainty created by the larger deficits. |
You're assuming that the economy will slow. I'm not suggesting that the Fed raise interest rates so high as to strangle growth, unless there is a real crisis with the currency. However, in that case they would be successfull in preventing a crisis in the dollar by raising rates to however high they would need to be. They were successfull at this in 1979, and I don't see why it would be different today.
Again though, I don't see any impending crisis with the dollar coming.
|
|
| |
|
|
|
Tingkai
|
|
To find the Northwest Passage
Aug 2001
time: 13:33
|
|
quote:
Originally posted by Kidicious
I think that China has been strong economically in the recent past, but there are serious imbalances there. They are looking at a correction, and I think that part of the reason is the weak remnimbi.
|
You mean the rmb is strong.
quote:
Originally posted by Kidicious
I can't see blaming Bush for what is about to happen in China.
|
What do you think is aobut to happen?
quote:
Originally posted by Kidicious
The dollar policy has been working pretty good in the US, and if there is a problem it is because the dollar isn't weak enough, not because it isn't strong enough.
|
Why do you think it has been beneficial?
quote:
Originally posted by Kidicious
On the other hand, the problem in China is the the currency is too weak and many speculators are anticipating a revaluation that should have already come. |
Why is there a pressing need for revaluation? The Chinese economy remains healthy. The peg is solid. How will China benefit from a revaluation?
|
|
| |
|
| |
All times are GMT. The time now is 05:33.
Apolyton Time is 00:33. |
top of page
|
| archivepost |
|
Forum Rules:
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
|
HTML code is ON
vB code is ON
Smilies are ON
[IMG] code is ON
|
|
|
|
|
|
18-02-2004 07:03
If the dollar is being devalued, and the remnimbi is pegged to it then the remnimbi is being devalued also. 
Canada
America
|