Chinese Economics Thread
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optionsss
Junior Member
You sure about that? Maybe you should listen what the guys from National Association of Manufacturers has to say about it.
Bring it up now only allows Geithner get past the senate, or else how do you think a guy evade taxes get to become a Treasury secretary. No one will buy into this, especially as the China trade surplus is shrinking and the world need every to cooperate and get over the hump.
Paulson pushed yuan up by 20% without using flamboyant words. I only wish Geithner knows what he is doing.
bladerunner
Banned Idiot
Well lets hope thats all it is, as earlier posters have said just hot air, but I fear critics such as Morici are gaining traction.It appears Obama has disappointed some of his supporters with his choice of appointments so he may play this currency thing for a while.
I was unable to hear all this interview on the BBC as I was driving, but the economist who was being interviwed said that it wasnt as bad in America as some people were saying, because Americas annual defecit was only 47% of GDP, while the years after WW2 it was 120% of GDP.. Yes I know the situation is different now, employement and manufacturing etc etc.
But it still puzzles me with comments about America being stuffed. The Way I see it Obama who has been given mesiah type adulation with the people, can capitalise on this and turn things around. By utilising these facts
1/ The avg American Income is $35,499 with savings as little as 1.5%>0.2% with some publications putting it in negative territory.
Well considering savings were as high as 10% in the mid 80's, the people could do the same again and using some of it it to buy treasury bonds.
2/The 1996 net worth of americans was $36.8 trillion with a 1999 household networth of $650.000 expected to rise to $1 million.
Now lets assume the $1million net worth was reached but in a worse case scenario the meltdown has reduced the figure down to say year 2001 total.
Surely this provides a substantial base for Obama to borrow from in the form of bonds, to implement his program. He could print the money and then retire it as the money trickles in from the people.???
I know theres probably a flaw in it somewhere
I was unable to hear all this interview on the BBC as I was driving, but the economist who was being interviwed said that it wasnt as bad in America as some people were saying, because Americas annual defecit was only 47% of GDP, while the years after WW2 it was 120% of GDP.. Yes I know the situation is different now, employement and manufacturing etc etc.
But it still puzzles me with comments about America being stuffed. The Way I see it Obama who has been given mesiah type adulation with the people, can capitalise on this and turn things around. By utilising these facts
1/ The avg American Income is $35,499 with savings as little as 1.5%>0.2% with some publications putting it in negative territory.
Well considering savings were as high as 10% in the mid 80's, the people could do the same again and using some of it it to buy treasury bonds.
2/The 1996 net worth of americans was $36.8 trillion with a 1999 household networth of $650.000 expected to rise to $1 million.
Now lets assume the $1million net worth was reached but in a worse case scenario the meltdown has reduced the figure down to say year 2001 total.
Surely this provides a substantial base for Obama to borrow from in the form of bonds, to implement his program. He could print the money and then retire it as the money trickles in from the people.???
I know theres probably a flaw in it somewhere
bladerunner
Banned Idiot
Shrinking?/ Its quarterly surplus is still the envy of many countries. Although this surplus is due to the fall in price of commodities, to some politicians and in these times the word surplus billions, despite how it is arrived at, will be like waving a red flag at a bull in a China shop.
China Speaks, U.S. Debt Market Listens
Ruthie Ackerman, 01.23.09, 05:00 PM EST
Beijing says it isn't manipulating the yuan, bond prices tumble.
China shot back at Timothy Geithner on Friday, after the U.S. Treasury secretary-designate told Congress that President Barack Obama thinks Beijing is manipulating its currency.
U.S. Treasury bonds suffered collateral damage from the war of words, with prices falling and interest rates rising. China has been a major purchaser of America's official debt in recent years, allowing the United States to run sizable budget and trade deficits. If it were to stop -- either to make a point or because the bond purchases do accomplish what many consider currency manipulation -- Geithner would likely find his Treasury paper having to offer higher yields to draw investors, putting new pressure on the American budget.
TradeTheNews.com said China on Friday issued a statement that it was “not manipulating its currency."
On Thursday Geithner wrote in answer to questions submitted to him by members of the Senate Finance Committee that, “President Obama — backed by the conclusions of a broad range of economists — believes that China is manipulating its currency.” He added that Obama will “use aggressively all the diplomatic avenues open to him to seek change in China's currency.”
Fearful investors pushed the yield on the 10-year note, which moves inversely from the price, traded at 2.65% on Friday, up from 2.59% on Thursday. The yield on the 30-year bond jumped to 3.36%, up from 3.26%.
Earlier this week, the Chinese state news agency Xinhua quoted central bank figures showing that the growth of Beijing's currency reserves are slowing at a time when Washington needs the country to buy Treasuries more than ever in order to fund its stimulus spending. (See “China Not A Limitless Sponge For U.S. Debt.”) In the past few years, the ballooning of China's foreign-exchange reserves seemed a given.
Beijing had been allowing the yuan to gently appreciate against the dollar since July 2005. At the time, the dollar bought 8.2765 yuan, but it had fallen to 6.8380 late on Friday, little changed from Thursday.
Schumacher
Senior Member
I remember reading that sometime in the 90s Clinton decided to 'get tough' with Japan on trade. The angry words thrown must have unsettled Japan so much that they forgot about an IOUs auction by US & were absent from the auction. Somehow, Clinton became less 'tough' after that. 
On a more serious note, I hope Obama will make China his first foreign stop. Can't see any other relations more important than this now.
On a more serious note, I hope Obama will make China his first foreign stop. Can't see any other relations more important than this now.
I remember reading that sometime in the 90s Clinton decided to 'get tough' with Japan on trade. The angry words thrown must have unsettled Japan so much that they forgot about an IOUs auction by US & were absent from the auction. Somehow, Clinton became less 'tough' after that.
On a more serious note, I hope Obama will make China his first foreign stop. Can't see any other relations more important than this now.
canada is the first stop. its an american tradition that bush failed to uphold and is now restored by obama.
[Refrain from generalization statements --- mod edit. Now carry on. ]
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bladerunner
Banned Idiot
In answer to your question i think they would be prepared to lend, listen to Obama's inauguration speech where he took a similar line to J Kennedy, when asking the people to do something for the country. I'm sure the Americans would respond to the best of their ability in much the same way a Chinese citizen would if called upon by their country in its time of need.
As I said in my earlier post, in 1996 Americans Net worth is 36.8 Trillion or in 1999 $650,000 per household. Avg income $35.499.00 I also said with the right policies Americans can be induced to the 1980s level of 10% savings. Meanwhile rather than borrow off China or if China wasnt interested in any more IOU's they could print the money, then withdraw it as the citizenrys money filtered in.
Thats old, in the last quarter the Western world plus america have put their credit cards away, and in the main only buying essentials, hence falling exports and surplus from China so maybe they wont have the spare money to lend as they would need the money to replenish commodities as they are drawn down.
The biggest proble I would see is the interest rate (Fed rate currently zero). If the US Govt is really serious about promoting savings, it needs to put its weight behind some protected savings accounts which pay interest at a rate that makes it worthwhile. Otherwise (as other peopel have mentioned in other places) you might be better off buying tins of beans!