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Theres a part of me that thinks that they will negotiate it out, but theres another part that suspects that China may play hardball on this topic. They vastly overproduced, and have for a while, and are facing consequences for that. I dont think they will accept ALL of the consequences, and won't budge on this.
What do people think, will China negotiate, or play hard ball?
ah...ya need a buyer for your goods...if none, you've over produced
More stuff = cheaper stuff = more buyers around the world. China has been winning with this formula for a long time now.
They don't have to sell all the commodities they produce. Steel, plastic and many other basic materials and commodities will outlive you or I. Which means they can patiently wait around for buyers to come back.
Can you "overproduce" gold, silver and dollar bills? Would you have a problem holding on to these things until the price is right to sell?
Supply of a good along with demand determines the price of a good. You may produce up to the point where average costs exceeds average revenue. Now if you can find a second market where you can sell the excess goods without it effecting the price in the primary market you can sell more goods as long as you are selling them above variable costs and still profit.
The big question is....Why don't we recognize getting "dumped" on is a good thing? I, as a consumer, want lower prices. Dumping benefits the consumer more than it harms the laborer. Getting dumped on is a good thing.
The trade war has been ongoing for years. The U.S. has been waving the white flag of surrender and foreign goods have been bombarding us enrelentingly.
The trade war has been ongoing for years. The U.S. has been waving the white flag of surrender and foreign goods have been bombarding us enrelentingly.
What a bizarre statement...
Foreign goods bombarding the U.S. forcing American consumers to buy? The U.S. is "surrendering" to domestic demand? How does that work?
How many times have people here gone to a Grocery store to find an item MARKED down below yesterdays price etc.
The reason is the product to be moved was "old" (outdated code) or the MFG needs to move/rotate their product for New sales.
Same could be said about a warehouse being full that needs to be emptied and refilled from the assembly production line.
Sitting on a movable item can be a "Up or Downer" investment wise.
As for my Grocery comment, I was in the Grocery trade for 23 yrs as an employee and business owner.
EDIT: On a further note, Three large countries are the main supplier of ARMS to the middle east conflict. Guess who one is that is fueling the needs extending the war there. YEP, your right on one of them.
Last edited by Steve Bagu; 04-02-2016 at 10:40 AM..
Reason: add info
Cause all this glorious "free" trade didn't work out for developed countries.
I expect more to come.
China is overproducing everything.
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