Gary A

Why Krugman Is Wrong About the Yuan

You will kill the US consumer if this game continues. Then that asset inflation will kill the US and world economies. I suggest that China will stop the hot money from Wall Street casino from jacking up their assets. Time to play hardball with Wall Street. Looks like the Saudis are playing hard ball with speculation as well. Too bad our leaders aren't as patriotic.

You are assuming that there are consumers in the world as dedicated to shopping as US consumers. You are wrong. And I am not advocating new US consumer debt, just more real money in their pockets.


On Nov 20 09:20 AM Tetrapod wrote:

> I keep hearing people say that the US has nothing to export.
> The US (as of 2008) is the 3rd largest exporter in the world:
> 1) Germany $1,466,137,472
> 2) China $1,428,686,080
> 3) USA $1,299,898,880
> 4) Japan $781,412,160
> Our exports are still only 10% lower than China's.
> If China's currency manipulation is ended, millions of jobs will
> return to the USA, and we will be buying capital equipment from China's
> bloated manufacturing infrastructure at a fraction of their cost,
> as manufacturing is repatriated.
> The US Administration is playing this correctly, forcing the dollar
> down in a big game of Chicken, until China is forced to drop or loosen
> their peg.

Why Krugman Is Wrong About the Yuan

Credit cards, lol. And usurious ones too!


On Nov 20 12:19 PM waf76 wrote:

> I have to agree with this article. Besides war, what does the US
> export?

Why Krugman Is Wrong About the Yuan

But a stronger dollar puts more money in the strapped US consumer's pockets. That is crucial to world recovery. Not a debt laden consumer, but a consumer with more purchasing power is the answer. Obama doesn't get it.


On Nov 20 01:38 PM user396040 wrote:

> I strongly disagree. A strong dollar makes it harder for US companies
> to export and compete against imports, discourages foreign tourism,
> and makes it harder to pay back dollar denominated debt. We need
> to get this country working again. There are all sorts of products
> and services we can and do export - high tech, food, etc. etc. In
> the long run, we must improve our balance of payments situation and
> it is impossible to do so at current exchange rates.

Why Krugman Is Wrong About the Yuan

Fox Business News and Cavuto are doing the same thing. Sour grapes from all these losers.


On Nov 20 01:51 PM mna wrote:

> Krugman is just parroting the official democrat position. Just know
> the political motives behind his comments and you'll be fine. It's
> fine to point the fingers at China, because we avoid having to point
> the finger at ourselves.
>
> That said, I do think the Yuan needs to be appreciated. It's actually
> in the interest of the Chinese to see it rise. A rising Yuan will
> do 2 things:
> 1) shut the American public up
> 2) increase their relative wealth in the world
>
> What it will NOT do, is decrease the trade deficit appreciably.
> It didn't work for Japanese deficit (think plaza accord), and it
> won't work for the Chinese deficit. When the Chinese do appreciate
> the Yuan, and the trade surplus doesn't get any smaller as so many
> predicted, the light bulb will finally come on. The average American
> will not have anyone to blame but themselves anymore. Then maybe
> we'll get some real fixes to the system.

Why Krugman Is Wrong About the Yuan

America and Wall Street want to export credit cards. That is why the Chinese know that their people will not go overboard in debt. That is why China knows that Wall Street and the US government are a threat to their export driven economy.

I am not for massive American debt either, but a stronger dollar would put more money into the pockets of Americans. That is crucial. Larry Summers, by driving the dollar down is destroying the golden goose of world prosperity, the US consumer.

Don't lean on the Chinese to consume away US problems. If they are smart they won't do it.


On Nov 20 02:41 PM Dragoman wrote:

> Great to hear that Vietnam can produce cheaper than China!
> It's seems like kicking a handicapped kid to point out that Christmas
> inventory was already priced and done so in dollars i.e. guess to
> takes the currency hit? Beyond that, the US doesn't export anything?
> Really? Someone please call the World Bank / IMF and tell them their
> stats are all wrong..
> Basically I-phones are nice, but I'm not sure that the Chinese government
> manipulating their currency is winning much support among the US
> manufacturers servicing the construction sector - which was a bit
> larger than the market for mobile phones when I last looked - and
> has been slogged by cheap but contaminated Chinese product.
> The reasons cited by Mr. Rein are the reasons why the US is in facing
> the trade crisis it is facing today. A policy of 'consume-or-die'
> is not the only option, and continuing a policy of exporting their
> personal wealth to China is understandably something American voters
> might not wish to continue.
> If China doesn't agree to float the yuan, then maybe a gradual depreciation
> of the dollar would clarify the situation, having at once the gratifying
> effect of improving the competitiveness of American products on foreign
> markets at the expense of China's national reserves.

Why Krugman Is Wrong About the Yuan

You don't get it. Americans cannot afford asset inflation. This is average Joe propaganda and I am all for it. I hope Wall Street chokes on the fact that China is also likely to stop the Wall Street hot money from pumping up their assets as well.

This world must fight asset inflation. And if that means killing Wall Street then so be it!


On Nov 20 06:37 AM BigBadBarry wrote:

> This almost sounds like Chinese Government propaganda to me...

China Becoming a 'Middle-Class' Nation

Jeff I agree with you that scaring the sheeple out of stock investments helps the bond salesmen, and we all know that Bernanke is primarily a bond salesman!!

I don't agree that the US is doing so great. I agree with you there too. I just don't see the Chinese consumer being able to sub for the US consumer to the degree necessary to pull the world out of recession.

I hope you are right, but I am not sure.

China Becoming a 'Middle-Class' Nation

Hey Jeff, thanks for engaging in responses, but, here is an article that says China has huge overcapacity in some industries, and that it takes massive debt to generate a return. Also, China is stuck on consumer spending being only 30 percent of GDP! That won't cut it, and won't result in decoupling. finance.yahoo.com/news...

China Becoming a 'Middle-Class' Nation

Jeff, this is an infrastructure recovery in China. It isn't an end demand recovery. The Chinese consumer cannot replace the American consumer. In my view the American consumer is the engine of world growth and will not be able to take the world forward, having been damaged by the ponzi housing and credit schemes of the Fed and Basel 2.

Watch how Asia reacts to weak economic news in America. It has a material affect on their stock purchases. They are more worried than you are.

And Jeff, if China's leaders are so worried about the US deficit doesn't that imply that they are concerned that the purchasing power of the US consumer is at risk and is a risk to their economy?

China Becoming a 'Middle-Class' Nation

I have trouble with this decoupling argument. I just don't think they are there yet. Shipping was down in a China index a few months ago. That seemed very odd to me.