US Economic Policy - Made in China

Boot · 08-09-2007, 12:01 AM

Quote:

Originally Posted by The Telegraph

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

"Of course, China doesn't want any undesirable phenomenon in the global financial order," he added.

http://www.telegraph.co.uk/money/mai...nchina107a.xml

Make sure you understand the attached, it indicates a major shift in the power structure of the world. You've suspected for some time that decades of deficit spending by the US government would have a cost, and all that time China has been buying US debt. So here is the new status quo: China is now an economic superpower in a position to dictate US economic foreign policy. It will be so until the US government repays trillions of outstanding government bonds.

I'm sure Congress will start working on that real soon.

xTYBALTx · 08-09-2007, 12:11 AM

Poor China. They think they're holding kings but they've got deuces on this one.

Lucky Shot · 08-09-2007, 12:21 AM

A lot of China's growth is dependent on their lack of a floating currency. Currently, it's artificially pegged lower then it's worth to the US dollar which makes their goods cheaper in the US. This is a big part of the reason why the trade deficeit exists as an artificially low Yuan continues to attract US dollars. If their Yuan was allowed to float, per our request, Chineese goods would become more expensive over time. Instead, a cheap Yuan continues to attract US dollars which they don't spend creating a trade imbalance.

While I would not like to see the release that is being described here, it's important that China spends the dollars and more important that they free the Yuan so that it will float at it's market rate. While a lower dollar does create trouble with the interest rates, it would make our goods cheaper overseas which means more US car sales, more media sales, and more airplanes sold.

Lucky Shot

Zephyr · 08-09-2007, 12:40 AM

Quote:

Originally Posted by xTYBALTx

Poor China. They think they're holding kings but they've got deuces on this one.

That video deserves a thread of its own.

What a genius. How calm, calculated, and just logical he can make it all seem.

-Zephyr

Lucky Shot · 08-09-2007, 12:46 AM

How did you watch it all so quick? It's a 60 minute video that he posted 30 minutes ago!

Still watching here.

Lucky Shot

Boot · 08-09-2007, 01:52 AM

Quote:

Originally Posted by Lucky Shot

How did you watch it all so quick? It's a 60 minute video that he posted 30 minutes ago!

Still watching here.

Lucky Shot

Heh ... I had to break at 10 min to get back to work (trying to increase some shareholder value here). But Friedman nails it about 6 min in... great find Tybalt. I'll get through the rest then respond.

aeroripper · 08-09-2007, 02:07 AM

Nice video. It was interesting the bit about him reflecting on his legacy, and the 'promotion of human freedom' as the overarching philosophy behind his economic theories.

Zephyr · 08-09-2007, 02:10 AM

It really gets me how I think I really do understand the trade deficit and all of what it means, and then I watch this and realize just how truly uninformed I am. We really need to stop letting media outlets do the thinking for us and get exposed to some raw economics, not scaremongering projections based on incomplete facts or outright opinion.

Sigh. 95 years old now? What a life...

-Zephyr

**Trooper** · 08-09-2007, 02:20 AM

funny thing about that video, great video btw, the host trys to keep up and act like he understands what he is saying.

I actually sent this video to my econ prof i had in college, great man.

Zephyr · 08-09-2007, 03:51 AM

Heh, yeah. Charlie Rose is a pretty smart man as far as talk show hosts go, but I don't think he's well equipped to deal with someone of this caliber. Hell, I don't think many people are. He really did try to maintain some sort of control but he just couldn't ask the right questions at the right times because Milton was so overwhelmingly changing his perceptions of the very things he was asking about.

-Zephyr

**Trooper** · 08-09-2007, 08:20 AM

Quote:

Originally Posted by Zephyr

Heh, yeah. Charlie Rose is a pretty smart man as far as talk show hosts go, but I don't think he's well equipped to deal with someone of this caliber. Hell, I don't think many people are. He really did try to maintain some sort of control but he just couldn't ask the right questions at the right times because Milton was so overwhelmingly changing his perceptions of the very things he was asking about.

-Zephyr

totally, not saying he is/was dumb just every time Milton would make a point or counter-point you could tell the host was getting frustrated because he couldn't ask the right questions quick enough. So he would just talk over him to get his point across.

I wouldn't mind sitting in a seminar with Mr. Friedman, just a smart guy that likes to share his knowledge.

xTYBALTx · 08-09-2007, 10:12 AM

Quote:

Originally Posted by Trooper

I wouldn't mind sitting in a seminar with Mr. Friedman, just a smart guy that likes to share his knowledge.

Nor would I...

Unfortunately, he died last fall at 94 years young.

**dfg872** · 08-09-2007, 05:04 PM

If you like friedman, pick up his book "Freedom to Choose" Amazing book, even though it was written like 27 years ago. I think china will think twice about actually pulling the trigger on destroying our economy. This story was just to remind congress that they could, as congress was talking recently about trade sanctions if the yuan didn't increase in value. Oh the joys of an economic cold war.

**El_Gringo_Grande** · 08-11-2007, 10:08 PM

The point of the original post, I think, isn't that China can destroy our economy. It is that many think China can destroy our economy. That is all it takes.

The fact is China could, in a number of ways, hurt our economy. Yes, they would hurt themselves in doing so, but their government could do it because of it's structure.

And even if they won't actually pull the pin, they can threaten. And that is all it takes, really, to get what it wants.

The market is at least 50% psychological. They can mess with our heads. That is probably enough.

**El_Gringo_Grande** · 08-11-2007, 10:23 PM

And here is a critique of Friedman. Just to spice things up.

08-09-2007, 12:11 AM	#2 (permalink)
xTYBALTx Join Date: Aug 2005 Posts: 3,676	Re: US Economic Policy - Made in China Poor China. They think they're holding kings but they've got deuces on this one. __________________ Current Tybalt theme song: Mason v. Princess - Perfect "$250,000 a year won't get me to Central Park West." Last edited by xTYBALTx; 08-09-2007 at 01:18 AM.

08-09-2007, 12:21 AM	#3 (permalink)
Lucky Shot Join Date: Aug 2005 Posts: 4,636	Re: US Economic Policy - Made in China A lot of China's growth is dependent on their lack of a floating currency. Currently, it's artificially pegged lower then it's worth to the US dollar which makes their goods cheaper in the US. This is a big part of the reason why the trade deficeit exists as an artificially low Yuan continues to attract US dollars. If their Yuan was allowed to float, per our request, Chineese goods would become more expensive over time. Instead, a cheap Yuan continues to attract US dollars which they don't spend creating a trade imbalance. While I would not like to see the release that is being described here, it's important that China spends the dollars and more important that they free the Yuan so that it will float at it's market rate. While a lower dollar does create trouble with the interest rates, it would make our goods cheaper overseas which means more US car sales, more media sales, and more airplanes sold. Lucky Shot

08-09-2007, 12:46 AM	#5 (permalink)
Lucky Shot Join Date: Aug 2005 Posts: 4,636	Re: US Economic Policy - Made in China How did you watch it all so quick? It's a 60 minute video that he posted 30 minutes ago! Still watching here. Lucky Shot

08-09-2007, 02:07 AM	#7 (permalink)
aeroripper Join Date: Dec 2005 Age: 25 Posts: 2,278	Re: US Economic Policy - Made in China Nice video. It was interesting the bit about him reflecting on his legacy, and the 'promotion of human freedom' as the overarching philosophy behind his economic theories.

08-09-2007, 02:10 AM	#8 (permalink)
Zephyr Join Date: Apr 2004 Age: 20 Posts: 1,647	Re: US Economic Policy - Made in China It really gets me how I think I really do understand the trade deficit and all of what it means, and then I watch this and realize just how truly uninformed I am. We really need to stop letting media outlets do the thinking for us and get exposed to some raw economics, not scaremongering projections based on incomplete facts or outright opinion. Sigh. 95 years old now? What a life... -Zephyr __________________ You were once like the newbie who needed a hand from above and TacticalGamer gave you it. You owe the newbie who comes after you that same outstretched hand from above on your honor as a Tactical Gamer. Tactics at TG come from trust and friendship, not meticulous detail and rigid discipline. Everyone should be assumed mature until proven otherwise. We are no clan. We are not a single game. We are mature, intelligent, and cooperative individuals. We are TacticalGamer, a community above and beyond its name.

08-09-2007, 02:20 AM	#9 (permalink)
Trooper Join Date: Jun 2005 Location: In my wifes house......if she says i can Age: 25 Posts: 8,373	Re: US Economic Policy - Made in China funny thing about that video, great video btw, the host trys to keep up and act like he understands what he is saying. I actually sent this video to my econ prof i had in college, great man.

08-09-2007, 03:51 AM	#10 (permalink)
Zephyr Join Date: Apr 2004 Age: 20 Posts: 1,647	Re: US Economic Policy - Made in China Heh, yeah. Charlie Rose is a pretty smart man as far as talk show hosts go, but I don't think he's well equipped to deal with someone of this caliber. Hell, I don't think many people are. He really did try to maintain some sort of control but he just couldn't ask the right questions at the right times because Milton was so overwhelmingly changing his perceptions of the very things he was asking about. -Zephyr __________________ You were once like the newbie who needed a hand from above and TacticalGamer gave you it. You owe the newbie who comes after you that same outstretched hand from above on your honor as a Tactical Gamer. Tactics at TG come from trust and friendship, not meticulous detail and rigid discipline. Everyone should be assumed mature until proven otherwise. We are no clan. We are not a single game. We are mature, intelligent, and cooperative individuals. We are TacticalGamer, a community above and beyond its name.

08-09-2007, 05:04 PM	#13 (permalink)
dfg872 Join Date: Nov 2005 Age: 27 Posts: 119	Re: US Economic Policy - Made in China If you like friedman, pick up his book "Freedom to Choose" Amazing book, even though it was written like 27 years ago. I think china will think twice about actually pulling the trigger on destroying our economy. This story was just to remind congress that they could, as congress was talking recently about trade sanctions if the yuan didn't increase in value. Oh the joys of an economic cold war. __________________ \|TG-Irr\| Dfg872

08-11-2007, 10:08 PM	#14 (permalink)
El_Gringo_Grande Join Date: Jun 2005 Location: OKIE HOMY Age: 39 Posts: 2,125	Re: US Economic Policy - Made in China The point of the original post, I think, isn't that China can destroy our economy. It is that many think China can destroy our economy. That is all it takes. The fact is China could, in a number of ways, hurt our economy. Yes, they would hurt themselves in doing so, but their government could do it because of it's structure. And even if they won't actually pull the pin, they can threaten. And that is all it takes, really, to get what it wants. The market is at least 50% psychological. They can mess with our heads. That is probably enough. __________________ Sen. John McCain (AZ) For President '08 --- I’m not racists, I have republican friends. Radio show host. - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt - "A foolish consistency is the hobgoblin of little minds" - Emerson - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette

08-11-2007, 10:23 PM	#15 (permalink)
El_Gringo_Grande Join Date: Jun 2005 Location: OKIE HOMY Age: 39 Posts: 2,125	Re: US Economic Policy - Made in China And here is a critique of Friedman. Just to spice things up. __________________ Sen. John McCain (AZ) For President '08 --- I’m not racists, I have republican friends. Radio show host. - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt - "A foolish consistency is the hobgoblin of little minds" - Emerson - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)

Sponsored links

Sponsored links

Sponsored links

Sponsored links