The Chinese are getting nervous. They are sweating over the possibility that the US dollar could get wiped out.
Tough crap, China. You practice the age-old craft of mercantilism by forcing your currency down so that you can flood our retailers with cheap goods at the expense of US workers. Now you're sitting on an enormous pile of US dollars that you fear could be worthless.
Who's dumber? The country that produced a lot of paper and exchanged it for manufactured goods, or the country that willingly accepted (and encouraged production of) that paper? Which country is more screwed?
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11 comments:
Oil production is about the same. Consumption, world wide is down. Stored supplies are at records.
Yet the price is up. Or is the value of the dollar down, such that it requires more worth...less dollars?
Like the saying goes; "Owe the bank $50k and they own you, owe $50mil and you own them."
We own the Chicomms.
The really bad thing for China is not the dollar but the fact that its manufacturing cost advantage is eroding. I wonder what the "true" costs of manufacturing in China are (including all bribes).
For some industrial products it's almost as cheap to manufacture in America. Our politicians should be trying to streamline regulations to make manufacturing as cheap as possible in America.
Can we outsource the imprisonment of Casey Serin to China? I'd like to see him in a forced labor camp.
Good article! Well done!
As someone who has designed goods to be made in China, I can tell you that Chinese manufacturers do not walk on water.
It has been incredibly difficult for my company to find mainland Chinese manufacturers who could produce what we wanted to the standards we require. I was pleasantly surprised several years ago to find that we could get plastic components for one of our product lines made better and more cheaply in western Massachusetts than in China. Of course the Chinese price includes transportation and customs, etc., but also the not terribly hidden costs of poor quality control on the Chinese part.
OTOH, poor quality is everywhere. We've had to reject bad finished goods and components made in Asia, Europe and North America. But the pervasive quality issues and associated costs of Chinese-made goods point to many opportunities for American manufacturers IF our Government were really serious about promoting the interests of American business.
In general, I doubt it. But THAT is another story.
Nice article, Tesla.
I think you may be off on your thinking Lou. I don't know what their portfolio looks like, but given todays inflation/exchange rates they have done well over the past ten years in US bonds, and will for the next few years until inflation exceeds the interst rate being paid. The bonds mature each year and they can take money off the table...the only person who can't walk away is you and me...IMHO
I recall thinking years ago when China was pegging their currency to the dollar that there was nefarious intent afoot.
The counter argument is that China helped millions of people (their own of course) out of poverty. The net result of the concerted economic union was a good thing, viewed universally.
Now we're dealing with the social repercussions here and the whole idea of universal goods may not be so easy to sell.
You could be right, Anon. I am just a peon like you. Who knows what's really going on.
Well, I do not really believe this will have success.
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