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sdnativeson.
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August 8, 2007 at 4:35 PM #72072August 8, 2007 at 6:42 PM #71968
drunkle
Participantwhy do our politicians want them to revalue their currency? isn’t the point of trading with and partnering with the chinese the fact that they have absolute control of their economy and labor? that that control is what provides the low cost products, the low “inflation”, etc?
http://www.americanprogress.org/issues/2004/10/b222937.html
looks more like some “investors” are pushing ulterior motives.
if they did sell off dollars causing a dollar “crash”, would they maintain their exchange rates? if they didn’t, it’d be a retro active revaluation anyway, at least in terms of dollars. if they did, then a yuan devaluation… what would that do? make them even more attractive to other countries, euro union, etc?
August 8, 2007 at 6:42 PM #72086Participantwhy do our politicians want them to revalue their currency? isn’t the point of trading with and partnering with the chinese the fact that they have absolute control of their economy and labor? that that control is what provides the low cost products, the low “inflation”, etc?
http://www.americanprogress.org/issues/2004/10/b222937.html
looks more like some “investors” are pushing ulterior motives.
if they did sell off dollars causing a dollar “crash”, would they maintain their exchange rates? if they didn’t, it’d be a retro active revaluation anyway, at least in terms of dollars. if they did, then a yuan devaluation… what would that do? make them even more attractive to other countries, euro union, etc?
August 8, 2007 at 6:42 PM #72094Participantwhy do our politicians want them to revalue their currency? isn’t the point of trading with and partnering with the chinese the fact that they have absolute control of their economy and labor? that that control is what provides the low cost products, the low “inflation”, etc?
http://www.americanprogress.org/issues/2004/10/b222937.html
looks more like some “investors” are pushing ulterior motives.
if they did sell off dollars causing a dollar “crash”, would they maintain their exchange rates? if they didn’t, it’d be a retro active revaluation anyway, at least in terms of dollars. if they did, then a yuan devaluation… what would that do? make them even more attractive to other countries, euro union, etc?
August 8, 2007 at 9:44 PM #72046bsrsharma
ParticipantStrong article by an ex-treasury secretary in Reagan administration:
————————————————————–
http://www.counterpunch.org/roberts08082007.htmlUncle Sam, Your Banker Will See You Now …
In the Hole to ChinaBy PAUL CRAIG ROBERTS
Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”
Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, “the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar.”
If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve.
The precarious position of the US dollar as reserve currency has been thoroughly ignored and denied. The delusion that the US is “the world’s sole superpower,” whose currency is desirable regardless of its excess supply, reflects American hubris, not reality. This hubris is so extreme that only 6 weeks ago McKinsey Global Institute published a study that concluded that even a doubling of the US current account deficit to $1.6 trillion would pose no problem.
Strategic thinkers, if any remain who have not been purged by neocons, will quickly conclude that China’s power over the value of the dollar and US interest rates also gives China power over US foreign policy. The US was able to attack Afghanistan and Iraq only because China provided the largest part of the financing for Bush’s wars.
If China ceased to buy US Treasuries, Bush’s wars would end. The savings rate of US consumers is essentially zero, and several million are afflicted with mortgages that they cannot afford. With Bush’s budget in deficit and with no room in the US consumer’s budget for a tax increase, Bush’s wars can only be financed by foreigners.
No country on earth, except for Israel, supports the Bush regimes’ desire to attack Iran. It is China’s decision whether it calls in the US ambassador, and delivers the message that there will be no attack on Iran or further war unless the US is prepared to buy back $900 billion in US Treasury bonds and other dollar assets.
The US, of course, has no foreign reserves with which to make the purchase. The impact of such a large sale on US interest rates would wreck the US economy and effectively end Bush’s war-making capability. Moreover, other governments would likely follow the Chinese lead, as the main support for the US dollar has been China’s willingness to accumulate them. If the largest holder dumped the dollar, other countries would dump dollars, too.
The value and purchasing power of the US dollar would fall. When hard-pressed Americans went to Wal-Mart to make their purchases, the new prices would make them think they had wandered into Nieman Marcus. Americans would not be able to maintain their current living standard.
Simultaneously, Americans would be hit either with tax increases in order to close a budget deficit that foreigners will no longer finance or with large cuts in income security programs. The only other source of budgetary finance would be for the government to print money to pay its bills. In this event, Americans would experience inflation in addition to higher prices from dollar devaluation.
This is a grim outlook. We got in this position because our leaders are ignorant fools. So are our economists, many of whom are paid shills for some interest group. So are our corporate leaders whose greed gave China power over the US by offshoring the US production of goods and services to China. It was the corporate fat cats who turned US Gross Domestic Product into Chinese imports, and it was the “free trade, free market economists” who egged it on.
How did a people as stupid as Americans get so full of hubris?
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: [email protected]
————————————————————August 8, 2007 at 9:44 PM #72163ParticipantStrong article by an ex-treasury secretary in Reagan administration:
————————————————————–
http://www.counterpunch.org/roberts08082007.htmlUncle Sam, Your Banker Will See You Now …
In the Hole to ChinaBy PAUL CRAIG ROBERTS
Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”
Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, “the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar.”
If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve.
The precarious position of the US dollar as reserve currency has been thoroughly ignored and denied. The delusion that the US is “the world’s sole superpower,” whose currency is desirable regardless of its excess supply, reflects American hubris, not reality. This hubris is so extreme that only 6 weeks ago McKinsey Global Institute published a study that concluded that even a doubling of the US current account deficit to $1.6 trillion would pose no problem.
Strategic thinkers, if any remain who have not been purged by neocons, will quickly conclude that China’s power over the value of the dollar and US interest rates also gives China power over US foreign policy. The US was able to attack Afghanistan and Iraq only because China provided the largest part of the financing for Bush’s wars.
If China ceased to buy US Treasuries, Bush’s wars would end. The savings rate of US consumers is essentially zero, and several million are afflicted with mortgages that they cannot afford. With Bush’s budget in deficit and with no room in the US consumer’s budget for a tax increase, Bush’s wars can only be financed by foreigners.
No country on earth, except for Israel, supports the Bush regimes’ desire to attack Iran. It is China’s decision whether it calls in the US ambassador, and delivers the message that there will be no attack on Iran or further war unless the US is prepared to buy back $900 billion in US Treasury bonds and other dollar assets.
The US, of course, has no foreign reserves with which to make the purchase. The impact of such a large sale on US interest rates would wreck the US economy and effectively end Bush’s war-making capability. Moreover, other governments would likely follow the Chinese lead, as the main support for the US dollar has been China’s willingness to accumulate them. If the largest holder dumped the dollar, other countries would dump dollars, too.
The value and purchasing power of the US dollar would fall. When hard-pressed Americans went to Wal-Mart to make their purchases, the new prices would make them think they had wandered into Nieman Marcus. Americans would not be able to maintain their current living standard.
Simultaneously, Americans would be hit either with tax increases in order to close a budget deficit that foreigners will no longer finance or with large cuts in income security programs. The only other source of budgetary finance would be for the government to print money to pay its bills. In this event, Americans would experience inflation in addition to higher prices from dollar devaluation.
This is a grim outlook. We got in this position because our leaders are ignorant fools. So are our economists, many of whom are paid shills for some interest group. So are our corporate leaders whose greed gave China power over the US by offshoring the US production of goods and services to China. It was the corporate fat cats who turned US Gross Domestic Product into Chinese imports, and it was the “free trade, free market economists” who egged it on.
How did a people as stupid as Americans get so full of hubris?
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: [email protected]
————————————————————August 8, 2007 at 9:44 PM #72174ParticipantStrong article by an ex-treasury secretary in Reagan administration:
————————————————————–
http://www.counterpunch.org/roberts08082007.htmlUncle Sam, Your Banker Will See You Now …
In the Hole to ChinaBy PAUL CRAIG ROBERTS
Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”
Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, “the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar.”
If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve.
The precarious position of the US dollar as reserve currency has been thoroughly ignored and denied. The delusion that the US is “the world’s sole superpower,” whose currency is desirable regardless of its excess supply, reflects American hubris, not reality. This hubris is so extreme that only 6 weeks ago McKinsey Global Institute published a study that concluded that even a doubling of the US current account deficit to $1.6 trillion would pose no problem.
Strategic thinkers, if any remain who have not been purged by neocons, will quickly conclude that China’s power over the value of the dollar and US interest rates also gives China power over US foreign policy. The US was able to attack Afghanistan and Iraq only because China provided the largest part of the financing for Bush’s wars.
If China ceased to buy US Treasuries, Bush’s wars would end. The savings rate of US consumers is essentially zero, and several million are afflicted with mortgages that they cannot afford. With Bush’s budget in deficit and with no room in the US consumer’s budget for a tax increase, Bush’s wars can only be financed by foreigners.
No country on earth, except for Israel, supports the Bush regimes’ desire to attack Iran. It is China’s decision whether it calls in the US ambassador, and delivers the message that there will be no attack on Iran or further war unless the US is prepared to buy back $900 billion in US Treasury bonds and other dollar assets.
The US, of course, has no foreign reserves with which to make the purchase. The impact of such a large sale on US interest rates would wreck the US economy and effectively end Bush’s war-making capability. Moreover, other governments would likely follow the Chinese lead, as the main support for the US dollar has been China’s willingness to accumulate them. If the largest holder dumped the dollar, other countries would dump dollars, too.
The value and purchasing power of the US dollar would fall. When hard-pressed Americans went to Wal-Mart to make their purchases, the new prices would make them think they had wandered into Nieman Marcus. Americans would not be able to maintain their current living standard.
Simultaneously, Americans would be hit either with tax increases in order to close a budget deficit that foreigners will no longer finance or with large cuts in income security programs. The only other source of budgetary finance would be for the government to print money to pay its bills. In this event, Americans would experience inflation in addition to higher prices from dollar devaluation.
This is a grim outlook. We got in this position because our leaders are ignorant fools. So are our economists, many of whom are paid shills for some interest group. So are our corporate leaders whose greed gave China power over the US by offshoring the US production of goods and services to China. It was the corporate fat cats who turned US Gross Domestic Product into Chinese imports, and it was the “free trade, free market economists” who egged it on.
How did a people as stupid as Americans get so full of hubris?
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: [email protected]
————————————————————August 8, 2007 at 11:48 PM #72087bob007
Participanttextiles can be manufactured in Bangladesh, Pakistan, Africa.
it might cost an extra dollar or two.It is hard to replace China in high volume electronic and light manufacturing
August 8, 2007 at 11:48 PM #72202Participanttextiles can be manufactured in Bangladesh, Pakistan, Africa.
it might cost an extra dollar or two.It is hard to replace China in high volume electronic and light manufacturing
August 8, 2007 at 11:48 PM #72211Participanttextiles can be manufactured in Bangladesh, Pakistan, Africa.
it might cost an extra dollar or two.It is hard to replace China in high volume electronic and light manufacturing
August 8, 2007 at 11:52 PM #72090Participantthe biggest difference between USA and China is that no one is going to prosecute Bush and his cronies after they leave office unless they broke laws.
A regime change in China is fraught with uncertainity at best and nasty at worst.
August 8, 2007 at 11:52 PM #72205Participantthe biggest difference between USA and China is that no one is going to prosecute Bush and his cronies after they leave office unless they broke laws.
A regime change in China is fraught with uncertainity at best and nasty at worst.
August 8, 2007 at 11:52 PM #72214Participantthe biggest difference between USA and China is that no one is going to prosecute Bush and his cronies after they leave office unless they broke laws.
A regime change in China is fraught with uncertainity at best and nasty at worst.
August 9, 2007 at 9:43 AM #72160sdnativeson
Participantbsrsharma, Of course China wants to achieve it’s ends, any sovereign nation does and is expected to do so, the exception of course is the U.S. . What was really said?
Is it along the lines of we(China, India, Soviets, Japan etc.) are not your true ally, we are not your friend, we shall cripple you and impose our will upon you when we can do so with minimal risk to ourselves?It’s possible that in the interest of brevity, that so many critical aspects of the Chinese economy, government and their tenuous positions are unadressed in opinions here. I surmise however, that they are not even taken into consideration.
Criticizing the U.S. how completely unoriginal.
You have a low view of America and it’s citizenry – warranted on some counts but undeserved on so many more. Critical thought however, is often mistaken for original and/or creative which it’s not, its more indicative of the true “sheeple” mentality (I saw that term on another thread here, it’s appropriate).Your comment, how did a people so stupid as Americans get so full of hubris shows quite a lot into your mindset. Honestly, what is stupid is to tell the people that you have no respect for exactly that. Perhaps you suffer from the same flaw.
In any case the “nuclear option” comment, in my opinion, is an empty threat (while I never dismiss any “threat” there is a deeper psychology to them that has to be considered again, I see as ignored here). I can’t help but view this as ham-handed and almost juvenile.
Paul Craig Roberts well….. I’ll be crass, my opinion of him is along the lines of a popular Monty Python quip ” I **** in his general direction” or something to that effect.
Bush and his “cronies”, Clinton and his/her “cronies”, bob007 and his “cronies” to those who continuously bleat along these lines, I suggest that you “kick the dog” one last time and move on, nothing of any value will come of it.
And ultimately validates bsrsharmas opinion of us.“The task is not so much to see what no one has yet seen, but to think what nobody has yet thought, about that which everybody sees.”
August 9, 2007 at 9:43 AM #72277Participantbsrsharma, Of course China wants to achieve it’s ends, any sovereign nation does and is expected to do so, the exception of course is the U.S. . What was really said?
Is it along the lines of we(China, India, Soviets, Japan etc.) are not your true ally, we are not your friend, we shall cripple you and impose our will upon you when we can do so with minimal risk to ourselves?It’s possible that in the interest of brevity, that so many critical aspects of the Chinese economy, government and their tenuous positions are unadressed in opinions here. I surmise however, that they are not even taken into consideration.
Criticizing the U.S. how completely unoriginal.
You have a low view of America and it’s citizenry – warranted on some counts but undeserved on so many more. Critical thought however, is often mistaken for original and/or creative which it’s not, its more indicative of the true “sheeple” mentality (I saw that term on another thread here, it’s appropriate).Your comment, how did a people so stupid as Americans get so full of hubris shows quite a lot into your mindset. Honestly, what is stupid is to tell the people that you have no respect for exactly that. Perhaps you suffer from the same flaw.
In any case the “nuclear option” comment, in my opinion, is an empty threat (while I never dismiss any “threat” there is a deeper psychology to them that has to be considered again, I see as ignored here). I can’t help but view this as ham-handed and almost juvenile.
Paul Craig Roberts well….. I’ll be crass, my opinion of him is along the lines of a popular Monty Python quip ” I **** in his general direction” or something to that effect.
Bush and his “cronies”, Clinton and his/her “cronies”, bob007 and his “cronies” to those who continuously bleat along these lines, I suggest that you “kick the dog” one last time and move on, nothing of any value will come of it.
And ultimately validates bsrsharmas opinion of us.“The task is not so much to see what no one has yet seen, but to think what nobody has yet thought, about that which everybody sees.”
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