Obama up 8 points

[Jon Miller]

Originally posted by KrazyHorse
Clever chinese bastards. They've taken all the green pieces of paper I could print, and all they gave me was boatloads of consumer goods.

But they have built up their manufacturing/etc while they do it.

I agree, they have a lot less consumer goods than they could have. But they do have a larger economy now, and that will allow them to produce more consumer goods in the future, for themselves if their government decides to do that.

JM

[KrazyHorse]

The amounts of money you're talking about are minuscule, Drake. The Chinese are providing cheap credit (in USD, no less, giving the US the nuclear option of inflating away the debt to China!) and cheap goods. They get to work hard and consume less than they produce. In exchange they get marginally interest bearing certificates whose return is swamped by any reasonable private bond, never mind equities or investments in their own capital projects. The Chinese are the suckers in this deal, not the US...

[KrazyHorse]

Originally posted by Jon Miller


But they have built up their manufacturing/etc while they do it.

And could have built it up more. Those green pieces of paper would have bought factories, machinery, education etc. for their people. Instead it's earning **** interest, sitting in a vault.

[Kidlicious]

Originally posted by Darius871
Trade it for what? For the Yuan? What countries outside China even have enough Yuan to make up for the mountains of USD China would need to get rid of? And even if they do, where do you think they will spend the USD they got from China?

They'll buy oil with them for one. Also, I believe that their other imports are also denomitated in USD. But I could be wrong. Anyway, change it to whatever they buy their imports in.

Like I told KH, the value of the USD would plummet.

[KrazyHorse]

Originally posted by Jon Miller


But they have built up their manufacturing/etc while they do it.

I agree, they have a lot less consumer goods than they could have. But they do have a larger economy now, and that will allow them to produce more consumer goods in the future, for themselves if their government decides to do that.

JM

JM, why not simply throw the goods they're producing into a hole and burn them then? If all they're going to do is sit on Treasuries, what use is it?

Money is useful because it buys ****. Not because it's a convenient hole to bury excess production in.

[KrazyHorse]

Originally posted by Kidicious
No it's not. You don't seem to keep in mind the fact that we're talking about a depression here. Exports are dear.

So it's not good for the US when the US exchanges a valueless object (dollah bills, y'all) for a valuable object?

You numbnuts....

[Kidlicious]

Originally posted by KrazyHorse
giving the US the nuclear option of inflating away the debt to China

How much of the debt do the Chinese own? It's not them much in comparison to the whole thing, they would be blowing it all up.

[KrazyHorse]

Originally posted by Kidicious


They'll buy oil with them for one. Also, I believe that their other imports are also denomitated in USD. But I could be wrong.

OF COURSE USD DROPS. There's more of it around. What did you not understand when I said there would be inflation in the US?

I thought you wanted to export things? Low USD = more exports. This is how current-account deficits unwind.



Either the dollar bills return to the US (meaning US exports stuff) or they do not, meaning that the US has taken out a loan it never has to pay back.

[Jon Miller]

They do get something back from the goods they send over. They just don't get enough back.

I agree that they could burn 80% (to pick a random high number) and make more of a profit on what they send over (by not doing treasuries). But I think they just ended up in the spot they are in, I don't think it was planned. Like they decided to increase manufacturing at the cost of getting less wealth (not 0 wealth) and have kept making that decision for the last 20 years.

At some point, they will stop making that decision.

JM

[KrazyHorse]

****, I wish I could buy things with pieces of paper I printed up which I would never see again.

Wait, that's called forgery, isn't it. Then again, I'm not the Fed and my landlord isn't the Chinese.

[KrazyHorse]

Originally posted by Jon Miller
They do get something back from the goods they send over. They just don't get enough back.

I agree that they could burn 80% (to pick a random high number) and make more of a profit on what they send over (by not doing treasuries). But I think they just ended up in the spot they are in, I don't think it was planned. Like they decided to increase manufacturing at the cost of getting less wealth (not 0 wealth) and have kept making that decision for the last 20 years.

At some point, they will stop making that decision.

JM

Yes, and they will sell into a down market.

Like I said, stupidity on their part.

[Kidlicious]

Originally posted by KrazyHorse


So it's not good for the US when the US exchanges a valueless object (dollah bills, y'all) for a valuable object?

You numbnuts....

One thing that I noticed about the way you think about economics, that's that the sum of the parts equals the whole. It doesn't work that way in economics. Even if a deal is good it can cause a crisis.

[Jon Miller]

I agree, it is pretty nice for us first world countries.

But every country that has industrialized has had to go through ****, at least this way the Chinese government is controlling the **** they are going through... not the US government.

JM

[Naked Gents Rut]

The amounts of money you're talking about are minuscule, Drake.

We must have very different ideas about what qualifies as a "minuscule" amount of money. Net interest on publicly held debt was $239 billion in 2007, about 9.5% of U.S. government spending. Upwards of 44% of that public debt is held by foreigners.

The Chinese are the suckers in this deal, not the US...

I don't disagree. I just think your "little green pieces of paper" explanation is dumb.

[KrazyHorse]

Originally posted by Kidicious


One thing that I noticed about the way you think about economics, that's that the sum of the parts equals the whole. It doesn't work that way in economics. Even if a deal is good it can cause a crisis.

If those dollars never come back to the US then there's no crisis. If they all come flooding back at once there will be a crisis. Which I've said over and over again in this thread. However, you haven't noticed it because you've been struggling to grasp even the simplest concepts. Like what currency is. Or how the Fed sets interest rates.