Slump in China's Yuan will offset US tariffs

Discussion in 'Economics & Trade' started by fullmetaljack, Nov 1, 2018.

  1. TrueScotsman

    TrueScotsman Well-Known Member

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    Domestically produced goods will only drive up wages if the resulting consumption is commensurate with levels from before. That wouldn't be the case, because products would be much more expensive and this net drop in aggregate demand would cause many people to lose their jobs. It would also major impact profit margins, so the great vacuum cleaner of the NYSE would no longer be sucking up the capital it needs.

    Its one thing to be critical of the established order, but Trump and his supporters don't even understand it. They think we have been getting screwed over, rather than this being actually an intended design in order to maximize the potential of our economy from a Capitalist point of view. Without Chinese currency manipulation, the low interest rates which Trump loves so much, would not be possible, neither would the stock exchange revenue be possible either. He is economically illiterate, his policies are rather used as exterior scapegoats in order to run the country in a more xenophobic and authoritarian direction.
     
  2. FreshAir

    FreshAir Well-Known Member Past Donor

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    Trump doesn't care about the working class, as long as he can slap the "Trump" brand on the renamed deal, it could be almost identical, he doesn't care
     
  3. FreshAir

    FreshAir Well-Known Member Past Donor

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    are we talking about China or the USA though?

    sadly Americans corporations are outsourcing jobs in record numbers and Trump doesn't seem to care

    [​IMG]
     
    Last edited: Nov 1, 2018
  4. Josephwalker

    Josephwalker Banned

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    You don't send to understand that growth brings more growth
     
  5. TrueScotsman

    TrueScotsman Well-Known Member

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    I didn't say Consumerism is all that, I informed you of what the system currently is intended to do. Consumerism also however, runs the American economy, which is dependent on production from emerging markets such as China in order to produce the cheap goods demanded by consumers and for the profit margins of multi national corporations. It doesnt matter that these people sell this stuff at a yard sale months later, that is economically irrelevant. It also has led to the lowest levels of unemployment, as the biggest employer in the country is Wal-Mart which is dependent on this type of trade. You think we would have more jobs if these profit margins were shrank, what delusions you hold.

    The government's budget deficit is also adding aggregate demand to the market, also at places like Wal-Mart where Food Stamps and other services are used, which without which people would likely starve and corporate profits would also be major impacted.

    Trump supporters simply don't understand the economy, they want to have their cake and eat it too.
     
  6. TrueScotsman

    TrueScotsman Well-Known Member

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    You don't seem to understand that growth in global markets, brought growth here at home. Economic Nationalism is a bankrupt ideology, it is even worse than the Neo Liberalism that created the international economic system we currently have.
     
  7. jay runner

    jay runner Banned

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    Nothing succeeds like success. BAMM!
     
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  8. yardmeat

    yardmeat Well-Known Member

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    That is not the worst case scenario. That's like saying the worst case scenario of doubling the corporate tax would be that the US gets more tax revenue.
     
  9. TrueScotsman

    TrueScotsman Well-Known Member

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    If we continue the trade war, they will start selling more of our debt, which was the reason they were purposefully lowering their currency. This will raise prices significantly, and increase interest rates, which will shrink the budget, increase the deficit and lower consumption domestically. Stupid economics!
     
  10. TrueScotsman

    TrueScotsman Well-Known Member

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    Yeah, nothing bad could happen from bringing the global economy to ruin. This is tantamount to modern Merchantilism, these idiots don't even understand Capitalism.
     
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  11. TrueScotsman

    TrueScotsman Well-Known Member

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    Growth in the 2000s brought collapse, oops.
     
  12. Mac-7

    Mac-7 Banned

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    The chinese have devalued their currency often as part of their mercantile policy

    We can always raise tariffs again
     
    Last edited: Nov 1, 2018
  13. Borat

    Borat Banned

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    Hmm. No. Doubling corporate taxes can lead to American companies leaving the country, declaring bankruptcy or hiking prices.

    Tariffs on Chinese junk as per OP have caused China to devalue their own currency without any negative consequences for the US, while the US coffers are being filled with tens of billions of tariff loot. Lol
     
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  14. Mac-7

    Mac-7 Banned

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    China can adjust to a drop in exports without tripping the end of the world
     
  15. yardmeat

    yardmeat Well-Known Member

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    If you think tariffs have no negative consequences, I encourage you to consult any economist since 1776. Aside from a few on the fringe left, you'll find a lot of examples. Or try talking to the many companies trying to cope with the artificially inflated prices. Or just look up the term "deadweight loss." Voluntary trade creates wealth. Artificially discouraging that trade destroys wealth.
     
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  16. TrueScotsman

    TrueScotsman Well-Known Member

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    China is sitting on 34 trillion debt, if we crash their economy, the rest of the globe will likely go with it. We don't know what China is able to withhold, their economy is not as transparent, but if this trade war gets worse they could torpedo our economy as the hold the trump card, possession of the largest portion of internationally held American debt.
     
  17. TrueScotsman

    TrueScotsman Well-Known Member

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    Protectionism was only relevant with the emerging American industry to compete with the more forceful policies then of the British Empire. These Tariffs are ultimately for domestic policy and to stimulate short term growth that Trump can also use to stimulate his influence. These are essentially him trying to manipulate xenophobes and the economically illiterate to throw support behind him.
     
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  18. Borat

    Borat Banned

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    It's just too bad that under "not-caring" Trump working class jobs are coming back and working class wages are going up, while under "caring" Obama the wages were dropping, the middle class was squeezed, struggling and shrinking and Obama whined that he needed a magic wand to bring back the jobs.
     
  19. Doofenshmirtz

    Doofenshmirtz Well-Known Member Past Donor

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    But doing nothing was working so well!
     
  20. Mac-7

    Mac-7 Banned

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    China holds the winning cards?

    I dont think so

    As I understand your argument we must give china what they demand or the chinese will blow themselves up and America with them

    I dont think the choice is that stark
     
  21. s002wjh

    s002wjh Well-Known Member

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    that was only true in early 2000s, but now they are shifting toward consumer base economy, devalue their currency go against that.
     
  22. s002wjh

    s002wjh Well-Known Member

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    manufacture are not coming back, its going to Vietnam/india/SE asia/mexico
     
    Last edited: Nov 1, 2018
  23. Borat

    Borat Banned

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  24. Pollycy

    Pollycy Well-Known Member

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    I'm pretty familiar with the German economy and all the many ways that Germans have so many of their frequent purchases subsidized by the government (health care and medicine come immediately to mind). I use the German economy as a 'barometer' because it is by far Europe's strongest and best example of a thriving economy. France is 'OK' (sort of), and it frequently partners with Germany. Nearly everything else in Europe (that is euro-based) is a floundering, corruption-wracked basket-case, and they'd probably crash-and-burn if it weren't for repetitive "rescues" and "stimulus" from the European Central Bank and the IMF.

    That said, I don't see anything about even the 'wonderous' German economy today that suggests its currency should be valued higher than the U. S. Dollar. Can someone, ANYONE, tell us all why the euro is valued higher than the U. S. Dollar?! This has never made any sense to me....

    Oh, and back on topic.... China is one of two major heavyweight countries in the world where the government tells its central bank 'how it's going to be' -- not the other way around. The other one is Russia. And that is an advantage that Trump does not have....
     
    Last edited: Nov 1, 2018
  25. Wolfpack

    Wolfpack Banned

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    So you're saying the slumping Yuan works in China's favor and hurts the U.S...?

    Any you call Trump the idiot???
     

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