Chinese Economics Thread

[pla101prc]

Seeing the Banks are paying next to nothing in fixed deposit interest,and the stockmarket is a little unsettled, why dont the ordinary people buy them.
I also read some of the Hedge funds have returned a profit in Dec. Is it a sign things are turning for the better?

there would be fluctuations here and there but to say that things are turning better overall is a bit of an overstatement. here is how it works. ever since the collapse of the bretton wood system, the US $ is founded solely on ppl's belief that US economy is doing well. so they needed a strong $ policy. decades of strong $ policy killed off their manufacturing and exports and these advantages were shifted to Japan and later on to China. in 1985 Japan was showing signs of catching up so the US forced Yen up in the plaza accord. in 1999 Euro was showing signs of catching up so the US initiated war on kosovo. after the IT bubble bursted in 2000 and 911 in 2001 led the US to use war on terror to keep investments in its own market instead of moving off to Europe. but with the failure in iraq and their lack of effective apparatus to force Euro down and Yuan up, the US is losing the game. so its economic collapse should have happened long ago but was delayed by america's hegemonic policies. but now its not as far ahead as everyone else compared to the pre-2003 era. so now there is really no reason for the US economy NOT to collapse.

p.s. i am not saying that the US economy will be obliterated i am just entertaining the idea that the collapse of US dollar hegemony is imminent...something that has been widely discussed among scholars and economists

 

[bd popeye]

pla101prc..stop using abbreviations such as ppl.!

i am not saying that the US economy will be obliterated i am just entertaining the idea that the collapse of US dollar hegemony is imminent...something that has been widely discussed among scholars and economists

Not going to happen..

Got a question for you.. If I have a Yuan and a dollar and where in Beijing could you spend them both in many shops and restaurants? Probably yes. Correct? Not take that same currency to New York City and try to spend that Yuan. You can't do it..anywhere. Got to Dubai do the same thing. That Yuan will stay in your pocket..you can't spend it. I know try Paris...same thing will happen.

Why do you want the US economy to collapse? I as an American am very insulted by your insinuations. Very insulted. I would not wish any sort or economic collapse on any nation anywhere.

 

[Autumn Child]

I thinks what he said was the collapse of US dollar hegemony, not the US economy which all of us know is not going to collapse. The elimination of dollar hegemony may be a good thing for asia as it can be less reliant on US dollar fluctuations. People are losing trust in the US economy and financial system because of the rescent crisis. I don't think you should feel insulted because it is just a natural reaction.

By the way...you can't use USD in china without converting to RMB first. Actually in china no one will accept your USD because most people here knows that RMB is appreciating against the USD in the long run. I am pretty sure you have to convert to Euro first before you can spend yuor money in Paris.

 

[bd popeye]

Thank you autumn child.

One of the reasons I asked him is because if the dollar collapsed the country he lives in would be very adversely affect. It would not be a good situation at all or anyone.

 

[pla101prc]

pla101prc..stop using abbreviations such as ppl.!



Not going to happen..

Got a question for you.. If I have a Yuan and a dollar and where in Beijing could you spend them both in many shops and restaurants? Probably yes. Correct? Not take that same currency to New York City and try to spend that Yuan. You can't do it..anywhere. Got to Dubai do the same thing. That Yuan will stay in your pocket..you can't spend it. I know try Paris...same thing will happen.

Why do you want the US economy to collapse? I as an American am very insulted by your insinuations. Very insulted. I would not wish any sort or economic collapse on any nation anywhere.

if the US economy collapses no one will come out in one piece. however, the collapse of US dollar hegemony is inevitable and might very well be a good thing considering how the US has been spending these cash. even before the financial crisis it is a generally accepted notion that US hegemony, like all of its predecessors, will not last forever, i am simply entertaining the idea that this particular crisis, when placed in the context of america's indisputable decline as a global hegemon, marks the beginning of the end for the dollar hegemony.

 

[FugitiveVisions]

there would be fluctuations here and there but to say that things are turning better overall is a bit of an overstatement. here is how it works. ever since the collapse of the bretton wood system, the US $ is founded solely on ppl's belief that US economy is doing well. so they needed a strong $ policy. decades of strong $ policy killed off their manufacturing and exports and these advantages were shifted to Japan and later on to China. in 1985 Japan was showing signs of catching up so the US forced Yen up in the plaza accord. in 1999 Euro was showing signs of catching up so the US initiated war on kosovo. after the IT bubble bursted in 2000 and 911 in 2001 led the US to use war on terror to keep investments in its own market instead of moving off to Europe. but with the failure in iraq and their lack of effective apparatus to force Euro down and Yuan up, the US is losing the game. so its economic collapse should have happened long ago but was delayed by america's hegemonic policies. but now its not as far ahead as everyone else compared to the pre-2003 era. so now there is really no reason for the US economy NOT to collapse.

p.s. i am not saying that the US economy will be obliterated i am just entertaining the idea that the collapse of US dollar hegemony is imminent...something that has been widely discussed among scholars and economists

wtf LOL :roll:

You know, there are a lot of Americans wishing a weaker dollar so that US exports can be more competitive. Guess who's preventing that from happening?

 

[pla101prc]

wtf LOL :roll:

You know, there are a lot of Americans wishing a weaker dollar so that US exports can be more competitive. Guess who's preventing that from happening?

EXACTLY, americans wish for a weaker US dollar. but what will that lead to? first of all, a weak US dollar in contrast with a strong Euro may actually channel investments from the US into Europe. this will undermine the dollar hegemony we have been talkin about. another problem is that a weaker US dollar may push up oil price, and price for imports, guess what's that gonna do? YES, our old friend inflation! we are all on the same boat for this one. a weaker US dollar will also hurt everyone that holds US treasury bonds. China, Japan, Korea, UK are the top holders so...
the problem is, the american manufacturing sector has been weakened so much that its impossible for the US to compete with germany and japan on the high-end and China on the low end. maybe except for the weapons industry. the big three's problems didnt start with the financial crisis, it started when ppl prefer japanese cars over american cars.
another important thing is, when japan's financial market collapsed in the 90s, it relied on manufacturing to survive. but the US has a much weaker manufacturing sector that it might not be able to support the country's economy when the financial market collapse. and how do you prevent the financial market from collapsing? better keep the dollar strong mate.
so if the dollar suddenly depreciates by a huge margin one day, its not a deliberate policy but prolly a sign of things going out of control.

 

[FugitiveVisions]

EXACTLY, americans wish for a weaker US dollar. but what will that lead to? first of all, a weak US dollar in contrast with a strong Euro may actually channel investments from the US into Europe. this will undermine the dollar hegemony we have been talkin about. another problem is that a weaker US dollar may push up oil price, and price for imports, guess what's that gonna do? YES, our old friend inflation! we are all on the same boat for this one. a weaker US dollar will also hurt everyone that holds US treasury bonds. China, Japan, Korea, UK are the top holders so...
the problem is, the american manufacturing sector has been weakened so much that its impossible for the US to compete with germany and japan on the high-end and China on the low end. maybe except for the weapons industry. the big three's problems didnt start with the financial crisis, it started when ppl prefer japanese cars over american cars.
another important thing is, when japan's financial market collapsed in the 90s, it relied on manufacturing to survive. but the US has a much weaker manufacturing sector that it might not be able to support the country's economy when the financial market collapse. and how do you prevent the financial market from collapsing? better keep the dollar strong mate.
so if the dollar suddenly depreciates by a huge margin one day, its not a deliberate policy but prolly a sign of things going out of control.

You are thinking of the dollar like some kid who can wake up on any day with bad hair. A weak dollar would allow the US to adjust a portion of its workforce from retail to manufacturing, and allow US products to be more competitive on the world market. The dollar is not just going to collapse one day, not other countries' economies are just as weak if not weaker. Europe is facing worse unemployment, its banking sector is just as bad, and a ton of Europeans will die off in the next 50 years with no one to replace them. Same with Japan. For the dollar to collapse there must surely to some other currency that people demand. Can you name me what that currency is?

 

[pla101prc]

You are thinking of the dollar like some kid who can wake up on any day with bad hair. A weak dollar would allow the US to adjust a portion of its workforce from retail to manufacturing, and allow US products to be more competitive on the world market. The dollar is not just going to collapse one day, not other countries' economies are just as weak if not weaker. Europe is facing worse unemployment, its banking sector is just as bad, and a ton of Europeans will die off in the next 50 years with no one to replace them. Same with Japan. For the dollar to collapse there must surely to some other currency that people demand. Can you name me what that currency is?

the US dollar wont suddenly depreciate the zimbabwe style. we are talkin about the dollar hegemony collapsing. and who is gonna replace the US dollar? no one. the american economy will keep a fair share of its global influence. Europe and China and Japan can take what the US gave up. so you are gonna see something like the European state system (balance of power wise) but a heavier demand on cooperation. there is simply no way that the current economic order will subsist without a corresponding political order to support it, or vice-versa

ps. this is a time for cooperation not protectionism. its okay if the US dollar strategically depreciates to achieve a temporary goal, but in the long term its gonna have remain stable. like i said weak dollar policy is risking inflation and it does good to no one. because its not like China cant adopt a weak RMB policy, they already said that RMB might depreciate.

 

[FugitiveVisions]

the US dollar wont suddenly depreciate the zimbabwe style. we are talkin about the dollar hegemony collapsing. and who is gonna replace the US dollar? no one. the american economy will keep a fair share of its global influence. Europe and China and Japan can take what the US gave up. so you are gonna see something like the European state system (balance of power wise) but a heavier demand on cooperation. there is simply no way that the current economic order will subsist without a corresponding political order to support it, or vice-versa

If the Saudis or anyone else rather accept the Euro or some other currency instead of the dollar, I think it should be up to them to decide that. But the problem is deeper than that. The reason that the Chinese or the Saudis end up with a bunch of dollar isn't because anyone is forcing the dollar, but that America is their preferred client and pays in the dollar. Again, the US at this point would prefer a weaker dollar, but someone is conspiring to not let that happen.

ps. this is a time for cooperation not protectionism. its okay if the US dollar strategically depreciates to achieve a temporary goal, but in the long term its gonna have remain stable. like i said weak dollar policy is risking inflation and it does good to no one. because its not like China cant adopt a weak RMB policy, they already said that RMB might depreciate.

Atlas the US consumer has already shrugged. The model of exporting to the US consumer to sustain growth is dead. Depreciating the RMB is only going piss off the other exporters and promote protectionism measures around the world. It's time to build up domestic demand.