17-07-2003 06:49									#121
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quote: The US figures don't count people getting unemployment checks.

Are you insane? This is mainly what the US counts... they don't count people not getting those checks .

	17-07-2003 06:49									#122
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quote: Originally posted by Odin @ Fezzie again. I don't believe anything by the CIA. I bet the TRUE unemployment rate is at least 7.5%, maybe even 9%, The US figures don't count people getting unemployment checks.

Fine don't believe anything the CIA says... what type of BS source are you busy posting?

	17-07-2003 06:51									#123
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quote: Originally posted by Tuomerehu Isn't it now a bad time to sell bonds, due to a bond market bubble?

As they sell bonds the price will fall. However, bonds might stay attractive if they economy doesn't pick up.

	17-07-2003 06:55									#124
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quote: Originally posted by HershOstropoler Fannie Mae and Freddie Mac, foremost.

Yeah right. We won't let them go bankrupt.

	17-07-2003 07:05									#125
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quote: Originally posted by DAVOUT Coming back OT, I wonder how the US citizens could feel comfortable with a budget system producing a forecasted deficit for the current year varying by 150 billions in five months. This should be a technical problem, not so hard to solve. But is it ?

Some economists forecasted the deficit to be this large in February, but Bush and Snow just conveniently made a very poor forecast. Hell, Snow said that tax revenue would increase. What an idiot.

	17-07-2003 07:07									#126
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I make a mistake you MORONS, But the point is that there are People ages 18 to 65 that are no included in the unemployment rate so the figures look better.

Fez, I don't trust an agency that lies about the reason for a war, why should I believe anything else they print. I don't fall to propaganda like you do.

*puts Fezzing Armor on*

	17-07-2003 07:09									#127
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quote: Originally posted by Tingkai It's great for Asia. China, Japan, Taiwan and Hong Kong billions in US government bonds and US dollars. Washington knows that if they piss off these countries, then the countries would sell off their US holdings and tank the US economy.

It's not in their interest to do that. The reason they have those holdings is to keep their currency undervalued so they can export to the US.

	17-07-2003 07:10									#128
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quote: But the point is that there are People ages 18 to 65 that are no included in the unemployment rate so the figures look better.

You mean like in every country?

But tell me how they are supposed to count everyone when some unemployed don't do anything (ie, basically drop off the face of the Earth as far as the government is concerned).

	17-07-2003 07:10									#129
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quote: Originally posted by Odin Fez, I don't trust an agency that lies about the reason for a war, why should I believe anything else they print. I don't fall to propaganda like you do.

But they didn't lie. Why should I believe anything the liberal media says?

You fall to propaganda alright. Everything one of your little personal heroes say. I might do the same but at least admit it yourself.

	17-07-2003 07:16									#130
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quote: Originally posted by Imran Siddiqui quote: But the point is that there are People ages 18 to 65 that are no included in the unemployment rate so the figures look better. You mean like in every country? But tell me how they are supposed to count everyone when some unemployed don't do anything (ie, basically drop off the face of the Earth as far as the government is concerned).

They can count them (that's where raw employment figures or labour force participation numbers come from). It's just that for some purposes it's better to only count those who are telling the government that they're actively looking for work...

	17-07-2003 07:17									#131
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quote: Originally posted by Japher I love how everyone assumes that immediate economic responses to financial stimulous. (this is sarcasm)

The economy responded even before the tax cuts took effect. In fact, I don't even think that they have taken effect yet. People change their expectations and they make economic decisions accordingly. Unfortunately they only bought more stocks. Stock prices went up a bit but they won't stay up because the govt is now selling bonds which will keep stock and bond prices down. That's going to really f'ck up confidence.

You see if the deficits don't raise interest rates, like idiot Snow is so worried about, it means that no extra spending occured in the economy. Even if rates go up, and they are, that still may not mean that more spending is occuring because the increase in supply of bonds also drives up yields.

	17-07-2003 07:20									#132
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I don't fall to propaganda. I dissagree with many things that other Liberals say. You, on the other hand, throw people out of helicopters if they disagree with you. If I fell for propaganda I would be saying that soviet communism was good, it wasn't, it was a spectacular beauracratic disaster.


SO SHUT IT, FEZZIE!!!

	17-07-2003 07:21									#133
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Who the Fez Fezzed up this Fezzing thread?

Shut your Fezzing yaps and stop shouting.

	17-07-2003 07:23									#134
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Please don't encourage him.

	17-07-2003 07:24									#135
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quote: Originally posted by KrazyHorse Who the Fez Fezzed up this Fezzing thread? Shut your Fezzing yaps and stop shouting.

Fez did it.

	17-07-2003 07:24									#136
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quote: Originally posted by Odin I don't fall to propaganda.

Says you. I could easily say the same. Doesn't mean it is not true.

quote: You, on the other hand, throw people out of helicopters if they disagree with you.

That's against the law as it is murder. I don't own a helicopter and wouldn't give up my life for a prison sentence.

quote: If I fell for propaganda I would be saying that soviet communism was good, it wasn't, it was a spectacular beauracratic disaster.

Well I am not saying Hitler was good.. he was not. He was evil, pure evil. So I don't fall for propaganda.

	17-07-2003 11:04									#137
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quote: Originally posted by Kidicious Yeah right. We won't let them go bankrupt.

Exactly what I said. How much did the S&L bailout cost? The GSEs will be a tad bit more expensive.

	17-07-2003 11:16									#138
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quote: Originally posted by Kidicious It's not in their interest to do that. The reason they have those holdings is to keep their currency undervalued so they can export to the US.

That's not a problem for China. The Yuan is tied to the US dollar and the US is China's major export market. So if China sells down its US reserves, the US dollar tanks, increasing import costs for Americans, except for stuff imported from China. So as the cost of importing products from other countries increase for the US, the US will start importing more from China.

At the moment, China benefits more by having the ability to push down the greenback, rather than actually doing it.

	17-07-2003 19:28									#139
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Keeping the Yuan tied to the US dollar would become more expensive as the US dollar came down in value wrt other currencies.

	17-07-2003 19:35									#140
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quote: Originally posted by Tingkai That's not a problem for China. The Yuan is tied to the US dollar and the US is China's major export market. So if China sells down its US reserves, the US dollar tanks, increasing import costs for Americans, except for stuff imported from China. So as the cost of importing products from other countries increase for the US, the US will start importing more from China.

No, the way the rennimbi (yuan) is pegged to the dollar is by the Chinese building up their reserves. They undervalue their currency by doing this. They can't sell their reserves and peg the rennimbi to the dollar at the same time.

	17-07-2003 19:51									#141
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At the moment, China benefits more by having the ability to push down the greenback, rather than actually doing it.

Over the last month, to keep the Yuan tie with the USD, China has to buy US dollars to the tune of about $600 million per day.

Last edited by DanS on 17-07-2003 at 19:58

	18-07-2003 18:56									#142
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Ah guys, the Chinese government does not allow free market trading of the Yuan. As a result, the Chinese government does not buy or sell currencies to tie the yuan to the US dollar like, say Japan does to hold down the Yen.

The only way the market affects China's foreign reserves is through import/exports. With China being a net exporter, it has more foreign currency coming into the country. That is why China's foreign reserves have increased.

The Chinese government has not been buying US dollars to prop up the peg. The reserve have been going up because more people are have been shipping capital from the US to China.

The downside for China is an increase in its money supply.

But if China began selling off the US dollar while buying currency of other countries then it would not have the inflation problem. It would simply be switching its foreign reserve holdings.

China could sell off 1%, 10%, 20% of its US cash reserves and it would have no direct affect on the peg.

We are not dealing with a typical free market supply-demand curve here. We are dealing with a highly controlled currency.

	18-07-2003 18:58									#143
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You have no idea what you are talking about.

	18-07-2003 19:24									#144
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Tingkai: What you say is true, but then there are other forces that wreck those plans. China has indeed been buying about $600 million a day to keep the peg.

http://news.ft.com/servlet/ContentS...d=1057562469743

In pertinent part...

Inflows of "hot money" into China have recently forced the central bank to buy an average of $600m (£422m) a day to keep the currency steady against the dollar. This pushed China's foreign exchange reserves above $340bn by the end of June from $316bn at the end of March. The surge is viewed by many as evidence of the undervaluation of the currency.

	18-07-2003 20:03									#145
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They're not buying dollars to keep the peg, in the sense that the Japanese government has been buying US$ to keep the Yen stable.

It is believed that Chinese nationals are dumping the US$ because they no longer consider it a safe currency. They now see the Yuan as being safe. This source of "hot money" is far more finite than "hot money" in other countries where currency rates are left to the free market.

The Chinese government's decision to purchase these US dollars is simply part of a long standing automatic currency mechanism.

The Japanese situation, a free market example, is different. Global market forces are weakening the US dollar. The Japanese government is arbitrarily and deliberately stepping into the market and buying US$. It is the result of a policy decision, not an automatic currency mechanism.

	18-07-2003 20:07									#146
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The Chinese government's decision to purchase these US dollars is simply part of a long standing automatic currency mechanism.

Isn't that just another way of saying that China is buying dollars to keep the peg?

	18-07-2003 20:10									#147
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Tangkai,

Where do you get this information? The Chinese keep dollar reserves for the same reason the Japanese do. To keep their currency undervalued. The fact is that Chinese currency is the most undervalued of all.

	18-07-2003 20:46									#148
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quote: Originally posted by DanS The Chinese government's decision to purchase these US dollars is simply part of a long standing automatic currency mechanism. Isn't that just another way of saying that China is buying dollars to keep the peg?

My point is that there are many different ways to peg a currency. Hong Kong, Japan and Mainland China all use different systems.

So if any of these countries began selling off their US$ holdings, the results would be different.

	18-07-2003 20:52									#149
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quote: Originally posted by Tingkai So if any of these countries began selling off their US$ holdings, the results would be different.

And the oriinal point was that they have no motivation to do that. They peg their currencies and collect reserves for a reason, and they will continue to do so.

	18-07-2003 20:58									#150
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So if any of these countries began selling off their US$ holdings, the results would be different.

Of course the results would be different for each. But how does that change the answer to the question at hand?