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  • US Economic Policy - Made in China

    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.


  • #2
    Re: US Economic Policy - Made in China

    Poor China. They think they're holding kings but they've got deuces on this one.
    Last edited by Nikolas; 08-09-2007, 01:18 AM.
    A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

    "$250,000 a year won't get me to Central Park West."

    Comment


    • #3
      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

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      • #4
        Re: US Economic Policy - Made in China

        Originally posted by xTYBALTx View Post
        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
        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.
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        • #5
          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! :p Still watching here.

          Lucky Shot

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          • #6
            Re: US Economic Policy - Made in China

            Originally posted by Lucky Shot View Post
            How did you watch it all so quick? It's a 60 minute video that he posted 30 minutes ago! :p 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.

            Comment


            • #7
              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.
              Like the server? Become a regular! TGNS Required Reading
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              • #8
                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.

                Comment


                • #9
                  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.
                  that sounds like a good idea trooper.
                  -Vulcan

                  Comment


                  • #10
                    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.

                    Comment


                    • #11
                      Re: US Economic Policy - Made in China

                      Originally posted by Zephyr View Post
                      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.
                      that sounds like a good idea trooper.
                      -Vulcan

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                      • #12
                        Re: US Economic Policy - Made in China

                        Originally posted by Trooper View Post
                        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.
                        A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                        "$250,000 a year won't get me to Central Park West."

                        Comment


                        • #13
                          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

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                          • #14
                            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.
                            Iím 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
                            - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                            - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

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                            • #15
                              Re: US Economic Policy - Made in China

                              And here is a critique of Friedman. Just to spice things up.
                              Iím 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
                              - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                              - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                              Comment

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