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"The port, however highlights what it sees as a concerning trend with export volumes down 22 of the last 23 months. They believe this was in large part due to the trade tensions with China. In September the export volume was flat at approximately 103,000 TEUs while it is down 16 percent for all of 2020. Further highlighting the issue, the port pointed to the fact that the volume of empties was twice that of the exports in the month. In September, 281,434 empty TEUs were returned from Los Angeles to Asia."
Looking at prior years, empty containers being sent to Asia are up about 30% overall, indicating that we are exporting much less while importing much more. Overall trade deficit data backs that information up. It's obvious why that is.
Most of the US economy is supported by consumer spending on services. A huge chunk of those direct-to-consumer services are shut down or hobbled by COVID-19 (sporting events, travel, restaurants, entertainment). The massive stimulus money poured into consumers appears to have been mostly shunted straight to China as people stayed home and purchased imported consumer goods online.
The cycle of deficit government spending, consumer debt, and cheap imports was already amazingly distorted before COVID. Now, with the stimulus, it appears that we've perverted the economic cycle even more. We are now literally borrowing dollars from China and giving them directly to US consumers, who then send them back to China to purchase more manufactured goods. Prior to COVID there were some intermediate steps in the process. Now we've completely streamlined it.
Here’s the big headline lie. China was never going to paid for the tariffs. American importers and their customers do. American farmers have been hammered by this administrations policy and are being subsided(not entirely) for massive losses and even still bankruptcies for farmers have skyrocketed. Winning trade wars is easy
Here’s the big headline lie. China was never going to paid for the tariffs. American importers and their customers do. American farmers have been hammered by this administrations policy and are being subsided(not entirely) for massive losses and even still bankruptcies for farmers have skyrocketed. Winning trade wars is easy
Agreed. If China was still doing good business with the US, most likely their ownership of US Treasuries would be rising.
China's GDP gain is virtually all from economic stimulus. 92% of the GDP growth figure amounts to the size of the fiscal stimulus package passed in May. The bounce back in trade with China is occurring in the subsequent quarter as US and Europe started to reopen and restocking of inventory for coming Christmas season.
Deficit from 3/30 to 9/30 is 3.1 trillion dollars. The Fed purchased 2.8 trillion dollars in securities outright. Long-term lending programs also act like purchase programs since Wall Street is the main beneficiary of these programs.
Doing QE for a long time (25 years) distorts incentives. Each bust requires larger deficits to fix, and the deficits don't quite work themselves down to balance or surplus as classic Keynesian theory would require. QE also benefits a narrow segment of the economy with increasing disparity in wealth and income. That concentration of wealth gives them power to fight off attempts to rebalance the budget and also becomes disruptive to politics per the big money behind the PACs and the fake advocacy groups and think tanks.
China's GDP gain is virtually all from economic stimulus. 92% of the GDP growth figure amounts to the size of the fiscal stimulus package passed in May. The bounce back in trade with China is occurring in the subsequent quarter as US and Europe started to reopen and restocking of inventory for coming Christmas season.
Deficit from 3/30 to 9/30 is 3.1 trillion dollars. The Fed purchased 2.8 trillion dollars in securities outright. Long-term lending programs also act like purchase programs since Wall Street is the main beneficiary of these programs.
Doing QE for a long time (25 years) distorts incentives. Each bust requires larger deficits to fix, and the deficits don't quite work themselves down to balance or surplus as classic Keynesian theory would require. QE also benefits a narrow segment of the economy with increasing disparity in wealth and income. That concentration of wealth gives them power to fight off attempts to rebalance the budget and also becomes disruptive to politics per the big money behind the PACs and the fake advocacy groups and think tanks.
I believe what we will see moving forward and longer term is that the Fed will keep a much larger balance sheet in regards to Federal debt. In function, essentially debt monetization. Which I believe that China has been doing for many years in their much more secret way.
"The port, however highlights what it sees as a concerning trend with export volumes down 22 of the last 23 months. They believe this was in large part due to the trade tensions with China. In September the export volume was flat at approximately 103,000 TEUs while it is down 16 percent for all of 2020. Further highlighting the issue, the port pointed to the fact that the volume of empties was twice that of the exports in the month. In September, 281,434 empty TEUs were returned from Los Angeles to Asia."
Looking at prior years, empty containers being sent to Asia are up about 30% overall, indicating that we are exporting much less while importing much more. Overall trade deficit data backs that information up. It's obvious why that is.
Most of the US economy is supported by consumer spending on services. A huge chunk of those direct-to-consumer services are shut down or hobbled by COVID-19 (sporting events, travel, restaurants, entertainment). The massive stimulus money poured into consumers appears to have been mostly shunted straight to China as people stayed home and purchased imported consumer goods online.
The cycle of deficit government spending, consumer debt, and cheap imports was already amazingly distorted before COVID. Now, with the stimulus, it appears that we've perverted the economic cycle even more. We are now literally borrowing dollars from China and giving them directly to US consumers, who then send them back to China to purchase more manufactured goods. Prior to COVID there were some intermediate steps in the process. Now we've completely streamlined it.
Where this leads is anyone's guess.
No it hasn't. First thing's first, never trust Chinese economic numbers.
Second, if you peer behind the veil, China is undergoing demographic collapse. China's working age population will plunge by 250,000,000 between now and 2050. During the same period, the United States will see its working age population increase by 50,000,000.
As a result, China desperately needs exports while the United States is not an export economy. So comparing the two makes no sense. It's an apples vs. oranges comparison, especially when you take capital inflow into the United States into account.
Because of the rapid aging of China's population, it is moving into a post-consumer society at an astonishing speed, which means that it desperately needs exports in order to fuel its economy. Yet over the next decade, virtually all developed countries become post-consumer economies, which means that they consume less. And if they consume less, that means they import less. The only exceptions to this among developed nations are the United States, France, Sweden, and New Zealand.
20% of China's GDP is dependent on exports. Meanwhile, only 5% of the United States' GDP is driven by exports, and half of that 5% is with Mexico and Canada. What's more, we're already seeing a trend to reshoring manufacturing to either the United States or Mexico. It began with the reduction of corporate tax rates, but it is already accelerating due to the effect of Covid-19 on supply chains.
What's more, you seem to have a shaky handle on the nature of debt in both the United States and China. China's debt has soared far beyond that of the United States', even if you omit that country's shadow banking system.
As a result, Chinese capital going to the United States is pretty much because we're a safe haven. More than a trillion dollars a year was leaving China a few years ago until its government clamped down with currency controls. And it wasn't because Chinese were feeling charitable. It was because Chinese were trying to get their money out of the country. A survey a couple of years ago of Chinese millionaires found that more than half were looking to leave the country. If China were the country of the future, do you believe that they would want to leave?
Here’s the big headline lie. China was never going to paid for the tariffs. American importers and their customers do. American farmers have been hammered by this administrations policy and are being subsided(not entirely) for massive losses and even still bankruptcies for farmers have skyrocketed. Winning trade wars is easy
A lot of items from China are really cheap. A lot of the 99c plus items made in China. Those are not very price elastic.
Quote:
Originally Posted by lchoro
China's GDP gain is virtually all from economic stimulus. 92% of the GDP growth figure amounts to the size of the fiscal stimulus package passed in May. The bounce back in trade with China is occurring in the subsequent quarter as US and Europe started to reopen and restocking of inventory for coming Christmas season.
Deficit from 3/30 to 9/30 is 3.1 trillion dollars. The Fed purchased 2.8 trillion dollars in securities outright. Long-term lending programs also act like purchase programs since Wall Street is the main beneficiary of these programs.
Doing QE for a long time (25 years) distorts incentives. Each bust requires larger deficits to fix, and the deficits don't quite work themselves down to balance or surplus as classic Keynesian theory would require. QE also benefits a narrow segment of the economy with increasing disparity in wealth and income. That concentration of wealth gives them power to fight off attempts to rebalance the budget and also becomes disruptive to politics per the big money behind the PACs and the fake advocacy groups and think tanks.
So basically just print more money, or just create more in whatever form is available
Quote:
Originally Posted by Hoonose
I believe what we will see moving forward and longer term is that the Fed will keep a much larger balance sheet in regards to Federal debt. In function, essentially debt monetization. Which I believe that China has been doing for many years in their much more secret way.
Basically create more paper trails/electronic ledgers on network cloud to keep track of moving that new money around in order to appear like each person involved is doing something worthwhile all while hiding behind the face of a business so no one need personal responsibility in case the public does not like something and wants to know more.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,072 posts, read 7,505,741 times
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Quote:
Originally Posted by Hoonose
Agreed. If China was still doing good business with the US, most likely their ownership of US Treasuries would be rising.
Not disagreeing. A more equitable trade and intellectual trade needs to be devised.
However, if one already own a good percentage of someone's debt, how much more to you want to acquire?
A lot of items from China are really cheap. A lot of the 99c plus items made in China. Those are not very price elastic.
So basically just print more money, or just create more in whatever form is available
Basically create more paper trails/electronic ledgers on network cloud to keep track of moving that new money around in order to appear like each person involved is doing something worthwhile all while hiding behind the face of a business so no one need personal responsibility in case the public does not like something and wants to know more.
Sure we need to take measures to prevent and watch for any fraud, but money tracing has nothing to do with what I said. What I said is that through the Fed we get more dollars out there for people and businesses to spend on what they need. A major Pandemic support. And if the Fed keeps the debt on its balance sheet into perpetuity, the taxpayer has next to no downside. Aside from any possible inflation.
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