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If two currencies are pegged and one country inflates their currency, which country has manipulated its currency?
The country that is pegging their currency is the one that is manipulating its currency. You are trying to mix to very different things, pegging your currency against another is a way of manipulating the exchange rate between your and another currency. On the other hand inflation is a domestic event, the US monetary policy can only cause inflation within the US and this doesn't manipulate exchange rates.
China has a soft peg to the US dollar because they are trying to keep their currency artificially cheap against the dollar. This makes their imports cheaper and our exports more expensive.
Dude, c'mon, obviously I'm not just referring to plastic things. The point is that most manufacturing done in China is not particularly sophisticated as a result if it was brought back to the US it would all be automated.
Quote:
Originally Posted by modeerf
Americans created manufacturing as it is today. Germany also.
Why is Germany the most financially successful country in the EU?
Because Germany has manipulated the Euro-zone to their advantage? German success has come as the result of Spanish, Italian, etc suffering.
Americans revolutionized manufacturing, but that was over 100 years ago. While Americans stuck to their 100+ year old methods the Asians innovated and now are leaders in manufacturing.
If the US was a larger manufacturing sector the answer is pretty simple, start innovating. But is this going to happen? Nope. Young entrepreneurs are focused on technology, creating stupid websites, etc.
Dude, c'mon, obviously I'm not just referring to plastic things. The point is that most manufacturing done in China is not particularly sophisticated as a result if it was brought back to the US it would all be automated.
Because Germany has manipulated the Euro-zone to their advantage? German success has come as the result of Spanish, Italian, etc suffering.
Americans revolutionized manufacturing, but that was over 100 years ago. While Americans stuck to their 100+ year old methods the Asians innovated and now are leaders in manufacturing.
If the US was a larger manufacturing sector the answer is pretty simple, start innovating. But is this going to happen? Nope. Young entrepreneurs are focused on technology, creating stupid websites, etc.
Wanted to rep you for this but couldn't, +1
Edited
We can do some things to foster manufacturing innovation, like fixing the issues with our education, labor, healthcare, tort, and tax systems.
We can do some things to foster manufacturing innovation, like fixing the issues with our education, labor, healthcare, tort, and tax systems.
This of course would be good, but I'm not sure if its going to do anything to strengthen the manufacturing base in the US. US entrepreneurs just aren't interested in manufacturing, even the folks "making" products seem to view manufacturing as something you have someone else do or don't need to think much about. I'm not sure how these attitudes are going to change.
Anyhow, everyone tends to think that manufacturing goes to China, etc because "cheap labor" and they entirely ignore the massive process innovative that occurs in China. Americans seem unwilling to believe that the Chinese actually are better at something today that Americans were historically strong at...
The american labor model needs to be changed. In the "median" America everybody thinks of, one could get a non-technical high school education, pop rivets for 30 years and live a middle class lifestyle with a couple of toys for the parents and a solvent model to raise your replacements. That's gone.
The education system that sustained that "dream" remains, and that's the fundamental problem. We could pick at each other all day about what entitlements to cut and what programs to favor, but the problems fundamentally stems from the fact drooling bored inattentive teenagers drudging through another course in memorizing quotes from dead presidents, aren't prepared at all to undertake the type and level of training that are going to enable them to gain, as a collective, the competitive employment that could emulate the success of their rivet-popping parents.
Both the K-12 AND the college system are in on that racket. Think about it. The people from your high school class who went into teaching were all the misses on the MRS degree track, who for the most part weren't the most academically or quantitatively inclined people in your class. These are the teachers of America. They get sick and tired of the de facto social refugee camp that is the public education system and they all end up treading water for the administration job so they can close out their career with a halfway decent salary. Same goes for tenure in college. Im not picking on educators and administrators gratuitously, I'm simply highlighting this level of rent-seeking and maintenance of the education status quo is sinking this country into second world standards of living. Our GINI index is already a joke for a country our size, and if you think wage disparity isn't a problem in this country, continue to let it slip and watch what happens to the streets. We need to suck it up, accept we cannot survive on the vocational models of yesteryear, and we need to retool our work force to be competitive in the demand of tomorrow. Reading about Jefferson and writing papers on the same ol 1950s crap ain't gonna get you a labor force prepared to be employed in the jobs of the future. And we cannot have a 1st world country on a labor force of Best buy part time customer service associates and hotel maids on one end and a a few egocentric Wall Street finance workers playing casino with grandmas retirement on the other! We need balance.
The reality is that private industry ain't gonna blink first, we need Government to (just like they do in Germany) infuse spenditures towards said labor force retooling and retraining/education.
A gainfully employed populace is obedient, law abiding, tax-friendly, etc etc etc. This is basic governance stuff. It's the interest groups that keep this thing tilted on its head. Both sides, from education interest groups to the blood sucking scumbags in the Investment Market playing casino on the law and order they chit on and take for granted, that allows them to play casino with a country's sweat and labor, and walk away with their lives every afternoon. This needs to be addressed.
One always has to remember that post WWII we were the exporters in the world and much of the wealth was built on just such export.Every great empiore was built on trade. One just ahs to look at europe and see that germany whose strength is based on its exports is by far the best economy in europe.The future growth and wealth of natons depdns on now they adopt to the frowing deamnds of the emeging markets. The old union made in america and sell it to non-unon people at higher cost to get more of the pie is dead.
The country that is pegging their currency is the one that is manipulating its currency. You are trying to mix to very different things, pegging your currency against another is a way of manipulating the exchange rate between your and another currency. On the other hand inflation is a domestic event, the US monetary policy can only cause inflation within the US and this doesn't manipulate exchange rates.
China has a soft peg to the US dollar because they are trying to keep their currency artificially cheap against the dollar. This makes their imports cheaper and our exports more expensive.
Since we see this 180 degrees opposite, let me say this: based on how far China has advance in the past couple decades and how far America has declined, I could only hope that my government would manipulate our currency as masterfully as China has done theirs.
Anyhow, everyone tends to think that manufacturing goes to China, etc because "cheap labor" and they entirely ignore the massive process innovative that occurs in China. Americans seem unwilling to believe that the Chinese actually are better at something today that Americans were historically strong at...
I disagree 180 degrees here also. Cheap labor, no regulation, and stealing OUR innovations is what has made Chinese a leading exporter.
One always has to remember that post WWII we were the exporters in the world and much of the wealth was built on just such export.Every great empiore was built on trade. One just ahs to look at europe and see that germany whose strength is based on its exports is by far the best economy in europe.The future growth and wealth of natons depdns on now they adopt to the frowing deamnds of the emeging markets. The old union made in america and sell it to non-unon people at higher cost to get more of the pie is dead.
Well said.
...well, it would have been well said if you would have USED SPELLCHECK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Since we see this 180 degrees opposite, let me say this: based on how far China has advance in the past couple decades and how far America has declined, I could only hope that my government would manipulate our currency as masterfully as China has done theirs.
It has nothing to do with currency manipulation and more to do with foreign policy.
BRIC develops foreign countries, the US does not. That is why BRIC is successful and why they will continue to be successful and why the will ultimately dominate the US.
Unless the US alters its foreign policy and starts developing countries and dumping foreign aid money into those countries and allow US corporations to be taxed in those countries, the US will end up on the bottom.
And when I say "foreign aid" I don't mean dumping money into "aid" programs that are actually front companies for the CIA and whose primary function is to gather intelligence and meddle in a country's internal and domestic affairs.
Quote:
Originally Posted by user_id
Dude, c'mon, obviously I'm not just referring to plastic things. The point is that most manufacturing done in China is not particularly sophisticated as a result if it was brought back to the US it would all be automated.
Yes it would.
Quote:
Originally Posted by user_id
If the US was a larger manufacturing sector the answer is pretty simple, start innovating. But is this going to happen? Nope. Young entrepreneurs are focused on technology, creating stupid websites, etc.
That is the primary problem. Most of the capital and resources in this country are wasted on things like 4,400 sq ft McMansions and on frivolous services.
However, nothing in Economics says a country has to have manufacturing. Economics simply says you do whatever you do best.
If exporting potatoes nets more money than manufacturing and exporting bicycles, then you shut down the bicycle plants and start growing more potatoes for export. Sure, the bicycle manufacturers will whine, but that's the way it goes. If they what to stay in business, then they will have to re-invent themselves and produce bicycles for export that net as much or more than potatoes.
Quote:
Originally Posted by modeerf
We now import things like food, clothing, building materials, appliances, tools, electronics, safety equipment, cabinetry, carpet, glass ware, cars, processing equipment (which the chinese stuff is really crap)
Well, again, there are Economic Laws and those Laws can never be violated and attempting to do so eventually only results in misery.
If you cannot export those things for a profit, then you shut them down and find something you can export for a profit.
Quote:
Originally Posted by Philip T
The Globalony Free Traders just start foaming at the mouth about the idea of any sort of Tariff that would stop the US from bleeding to death on Transnational Corporate trade -- which is mostly tax free, btw.
And then comes the BS and lies.
Take the cited farce example in this thread -- 1922 and how that hit agriculture. Even the slightest background check would give the information that Ag had Already Been Hit . . . not due a tariff, but rather the end of WW1. Germany, France and England were back in the Ag Business (duh!) Even some simple info from Wiki gives this background.
That's highly illustrative of the problem in the US.
You are all living in the past glory days and cannot bring yourselves forward to the present, and that is probably stalling and thwarting any necessary re-invention of your business models more than anything else.
Quote:
Originally Posted by Philip T
THAT was 1921. Before the Tariff. Sooooo. as in all these discussions -- how does an event precede that which is supposed cause it? Real mystery, there.
And in all the common (mis) cites of tariffs harming US -- the US was generally a Net Exporter. NOW is a whole different world. We are a Net Importer.
So of course, now, a reasonable, balanced trade tariff would be good for US. When the trade imbalance goes to zero, the tariff goes to zero. As do the Transnational Corporation profits from the Global Plantation model.
So do you figure the folks that argue against US Balanced Trade Tariffs:
A) Work for Wal-Mart?
B) Work for Dollar (this or that) Store?
or
C) Are products of a US MBA program? (and actually believe their nonsense).
The first two at least know what they are doing.
Selling US out -- for less.
That is all irrelevant in the grand scheme of things.
The simple fact is that the world now operates on a Global Economy and the US is part of that Global Economy whether it wants to be or not, whether you like it or not, whether you think it's a good idea or not.
If you cannot bring yourself to the present and learn how to operate in a Global Economy, then you will fail, and fail miserably and your suffering will be legendary.
Whether you like it or not, whether you understand it or not, the simple fact remains that US manufacturers are no longer competing against other US manufacturers.
US manufacturers are now competing against all the world's manufacturers.
That is the new reality and you can do absolutely nothing to alter that reality, so get used to it.
The tired old mind-set of the past, when US manufacturers only had to compete against other US manufactures, the issue was Market Share. The goal of US manufacturers was to capture as much Market Share as possible, to increase sales, to increase revenues, to increase profits.
In the new reality of the here and now, Market Share is still the primary issue except Market Share is no longer limited to the US. Market Share is now the entire world.
So capturing 30% of the US Market Share is meaningless when the US is only 4.5% of the Global Market.
30% of the US Market is only 1.35% of the Global Market.
A foreign competitor with 30% Global Market Share has 28.7% of the non-US Global Market. It's profits will dwarf any US manufacturer.
Someone explain to me how the US selling its widgets at $49/each is going to compete in the Global Market against manufacturers selling their equal quality widgets for $29/each?
The US cannot compete.
Ultimately what happens is those foreign competitors come to the US with their cash and they buy US companies through leveraged buy-outs and hostile take-overs and then they close the US companies and import their products.
And if they don't close the US companies, they slash the work force and then move the company to another State where they don't have to worry about union idiots and they pay lower wages.
You lose no matter what, and all of the tariffs and all of the laws barring companies from moving to other countries isn't going to change the fact that you lose.
And as an investor, if I cannot get satisfaction here in the US, because of your stupid tariffs, then I will pull my money out of US companies and invest it in the foreign competitors who are stomping the guts of US companies out with their profits.
You lose again.
There is no way you can possibly win. You either adapt to the changes taking place, or you will end up as a 2nd World Country in about 20-25 years.
When BRIC starts developing sub-Saharan Africa, I don't know what you all are going to do, but I suspect there will be plenty of wailing and gnashing of teeth and wringing of hands and putting on sack-cloth and pulling out hair.
This ain't 1938 where you can threaten to invade Mexico because Cardenas expropriated the assets of US oil companies who refused to pay taxes (and who violated an order of the Mexican Supreme Court by refusing to pay comparable wages to managers, geologists, petro-chemical engineers and other university trained salaried workers).
You ain't got that kind of clout, and you don't have the money.
And the sad thing is, what if US presidents had told US oil companies to **** and pay the just taxes owed?
Where would Mexico be today? Right behind you in terms of development and eagerly wanting to trade equally with you and you'd probably still have some manufacturing jobs because the Mexicans would be earning enough wages to buy the garbage you produce.
Your foreign policy over the last 100 years has really put you in the gutter and you might never climb out, I hope you all realize that. Why do you think BRIC is doing the exact opposite of what you did?
That is the primary problem. Most of the capital and resources in this country are wasted on things like 4,400 sq ft McMansions and on frivolous services.
However, nothing in Economics says a country has to have manufacturing. Economics simply says you do whatever you do best.
If exporting potatoes nets more money than manufacturing and exporting bicycles, then you shut down the bicycle plants and start growing more potatoes for export. Sure, the bicycle manufacturers will whine, but that's the way it goes. If they what to stay in business, then they will have to re-invent themselves and produce bicycles for export that net as much or more than potatoes.
A resource economy works great when you have a low ratio of population/resources. Example: Western Canada (oil, ag, timber, minerals, hydro).
We don't have that in the USA.
Historically, the transition to a services economy has not compensated for the manufacturing and resources trade deficit, and has mostly just led to an increase in the percentage of government jobs. I don't see that as a way out either.
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