The US is indeed excessive on its consumption habits.
We should aim to develop consumption, but not to that extend. This is where a strong state is important in order set up guardrails against the disorderly expansion of capital
Chinese Economics Thread
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We should aim to develop consumption, but not to that extend. This is where a strong state is important in order set up guardrails against the disorderly expansion of capital
China consumptions is not growing as much because of the present economic situation. Chinese/ East Asians tend to be more conservative in spending by choice during uncertain times. They tend to save now, spend later. Consumptions will increase as confidence return. Chinese spendings habits are completely different to that of the US or Australia where the norms are spend now pay later and in the process accumulate massive household debts, encouraged by government policies of spend, spend, spend, with generous handouts, lower taxes and low interest rates. Also because of coming elections in both countries, hard and prudent policies will not be applied until after the elections, resulting in high inflations make worse by supply chain problems.
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That I do not buy.
My guess is that what is going to happen to the USD is the same thing that happened to the British Pound. It slides into a lesser status depreciating along the way.
Maybe 50 years ago, the Pound was worth 5x times it is today. Forget. Imagine the dollar being a quarter of its value 20-30 years from now. That is very realistic, with the money printing.
The inflation picture is very interesting too.
It is the EV, where the government mandates the end to the internal combustion engine. There is not enough of those minerals required for this industrial transformation. That means built in inflation.
Going forward, seems like the dollar will buy less and less.
The dollar is going up today because the United States was successful in taking the opportunity of the Russia Ukraine war to turn most of Europe into obedient vassal states. The dollar has increased in value to most European currencies, but the dollar does not gain ground on the RMB, that is the other way around for that.
If China did not suppress the RMB value, the Chinese currency would go up a lot. They want to maintain exports, so the value of the RMB remains constant. Eventually they will have to anyways.
Right now, it is a twin threat to the value of the USD, in the long run. Increasing costs due to industrial changes requiring more minerals which the United States do not have, and the rise of China and the RMB.
As far as China is concern, the value of the dollar is not really their concern. They have enough to deal with with governance of the country as it is.
But ... we see ... there is the interesting trick ...
The US dollar is the reserve currency of the world.
Almost everyone expects the USD to decrease in value relative to commodities and to the Chinese currency RMB.
That is the trick here.
How much of a depreciating asset are people willing to hold?
If something is going down, we're suppose to sell it, right?
Yet, there are some commentators expect people to hold on to dollars because it is the reserve currency, even if it is going down.
Guess those same people have a hole in their heads.
Some commentators in the Western media really don't have two nickels to rub together.
This crisis in Europe, caused the USD to rally against European currencies. That makes sense. There was a crisis in Europe, and hence, European currencies fell.
Sooner or later, there will be another financial event in the United States that will be a crisis. If it turns into a dollar crisis, then it can get very interesting.
The US dollar is the reserve currency of the world.
Almost everyone expects the USD to decrease in value relative to commodities and to the Chinese currency RMB.
That is the trick here.
How much of a depreciating asset are people willing to hold?
If something is going down, we're suppose to sell it, right?
Yet, there are some commentators expect people to hold on to dollars because it is the reserve currency, even if it is going down.
Guess those same people have a hole in their heads.
Some commentators in the Western media really don't have two nickels to rub together.
This crisis in Europe, caused the USD to rally against European currencies. That makes sense. There was a crisis in Europe, and hence, European currencies fell.
Sooner or later, there will be another financial event in the United States that will be a crisis. If it turns into a dollar crisis, then it can get very interesting.
Before the South Korean government made a concerted effort to encourage K -Pop in the 90s, it realized Jurassic Park the movie made more money than all the cars Hyundai sold that year.
The Beatles, Disney World, McDonald’s (for better or worse), etc..influenced entire generations of people. None of these have anything to do with Us strength in military or tech.
People that lack soft power down plays it’s importance. Both soft and hard power are important.
Yeah. Sex, drugs and violence, pop culture mixed with substance abuse and fast food.
Very important gay power. Got it.
On one hand, China's manufacturing power keeps attracting FDI as expected. On the other hand, is it becoming a new kind of imported inflation driven by the paper money printed in the US/EU/etc.?