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You can't artificially depreciate your currency against the USD and run a trade surplus without buying USD. China buying T-bills will continue as long as they wish to peg with the USD.
They are going to move their capital, how? Americans have dollar denominated capital, they can't just move it. Not unless you think there is a magic genie that will convert it into any other currency you want.
Buy gold/precious metals with USD. Then buy whatever currency you want with gold/precious metals.
Buy gold/precious metals with USD. Then buy whatever currency you want with gold/precious metals.
How is this relevant to what you are responding to? For someone to purchase gold with dollars, there has to be someone willing to sell gold for dollars! There is no transfer from dollars to gold, only a transfer of ownership of gold.
They certainly can just look at the commodties they are pruchasing. Its just that they have so much to invest. They are lilely to keep buying our trteasuries as long as they are taking so much cash from us i trade defcit. let that chnage and see waht happens. For now it pays big for them to keep us consuming but tehy have hedged their bets lateoly.
It was not, it was a counter-factual. They are still purchasing US debt.
Outsourcing is not moving capital.
Its amazing to what degree people believe in magic genies that can convert your currency to whatever you wish...
Outsourcing usually involves combining First World capital and know-how with Third World labor, for what Lou Dobbs and Paul Craig Roberts refer to as "absolute advantage". That is how capital moves offshore. India and China are not pulling wealth out of thin air -- they're taking it from the U.S. middle and working classes.
Outsourcing usually involves combining First World capital and know-how with Third World labor, for what Lou Dobbs and Paul Craig Roberts refer to as "absolute advantage".
A US company cannot "outsource capital" to another country unless there is demand in that country for US goods/services. US companies' capital is dollar denominated.
What fools like Lou Dobbs talk about is really just the "human pain" associated with creative destruction. Whether the production is being out-sourced to another country or to a robot is the same...the people that use to be employed in the sector have to find alternate sources of income. Much of this "pain" can be avoided by keeping up your skill set, but Americans tend to have the mind set that they should be able to make a living doing X for their entire lives.
Quote:
Originally Posted by Read Culture of Critique
India and China are not pulling wealth out of thin air -- they're taking it from the U.S. middle and working classes.
You're right they are not pulling wealth out of thin air, they are pulling it out of their hard work and successful social/economic engineering. Don't you think its a bit funny to imply that China is sucking wealth out of the middle-class, when these people have been the main benefitaries to Chinese lending? The US has a trade deficit with China....yet its China that is sucking our wealth? Haha....
China is also a bubble, but one built on slave labor and Government manipulation. If the United States would get out of the way of new startups and stop manipulating the monetary system, we would have left China way behind. The only opposition would be from the unproductive financial sector, which I would gladly see destroyed or outsourced somewhere else. Just give them a pile of monopoly money and let them cheat each other with it.
Without the financial sector there wouldn't be any other sectors. Man are you nutty dude.
On the contrary, without the financial sector of today we would have a much more stable economy and enjoy higher standards of living. The real financial sector needed is a tiny fraction of what we have now. Banking would then rely on savings, not fractional reserve theft by inflation. Nothing nutty about a system that returns capital to productive business than to unproductive speculators and con artists to live it up on stolen bonuses. The current Treasury certificates would be shunned in favor of investing in companies that you know and trust.
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