Currency Wars

[Widdekind]

The helicopter drop was Milton Friedman's thought experiment. The point of it being that demand is raised everywhere at once... monetary transmission is more toward the "helicopter drop" side of the spectrum, where it raises demand in many places all over the economy at once.

new loans of credit are constantly extended, to numerous individuals, throughout the economy ? in the "short-term", new credit resembles new money; new "money" thusly "materializes" into the economy, at numerous locations. e.g. many individuals each day borrow credit, for new cars; all of their purchases inject "money" into all those car dealerships, their employees, their grocery-stores, movie-theaters, restaurants, etc.

...how money affects demand in the economy, whether entering at a point and diffusing raising demand in locally at first ("new money" hypothesis); or causing demand to rise relatively evenly over the whole economy at once... the credit channel [is not] the only way money affects demand.

"microscopically", new "money" enters the economy at one location, because new credit is loans for single purchases, at single establishments; "macroscopically", the "NM" hypothesis applies in a "distributed" manner, with many "injections" co-occurring simultaneously ?

 

[Widdekind]

China is hurting us by selling us low priced goods...

Our problem is that liberalism made us uncompetitive, not that China gives us great prices...

power-hungry thugs in US factories that are trying to live off our taxes...

First, from the 'Equation of Exchange', MV = PQ. If "P" represents Prices (Price-level), the is the currency exchange-rate, between two economies, represented as

P1/P2 = (MV/Q)1 / (MV/Q)2​

? If so, then China's central-bank does not (directly) affect either Chinese production (Q1) or US production (Q2); instead, they hoard USD acquired from trade (effectively reducing M2), whilst creating more of their own currency (effectively increasing M1) ? Thereby, they manipulate the currency exchange-rate (P1/P2) ?

Second, if one USD becomes worth more Yuan... then why don't Yuan become worth less USD ? So, $1 is now worth zillions of Yuan... why can that $1 purchase more product (why don't their products just come to cost more) ? Somehow, the Chinese must be fixing their Prices, with-respect-to USD, and just "agreeing" to over-value USD ? The Chinese Government issues orders, requiring Chinese to "pretend" USD are "huge bars of gold" ?

If the Chinese Government is manipulating Prices, with extra-market "Force"; then that would disadvantage US markets, not employing equal Government "Force" (e.g. US Government issues orders, requiring Americans to "pretend" Chinese Yuan are "huge bars of gold", so that their DVDs are more expensive). Ultimately, China is seemingly "simply requiring" Chinese to "make believe" that USD are worth more in real products (e.g. rice, soy) than they actually are.

 

[EdwardBaiamonte]

then that would disadvantage US markets, not employing equal Government "Force"

how do low prices disadvantage us??? My parents always told me to I'd get richer if I looked for and found lower prices? Should I really be looking for higher prices? Should the entire country be looking for the most expensive imports?

 

[Widdekind]

then that would disadvantage US markets, not employing equal Government "Force"

how do low prices disadvantage us??? My parents always told me to I'd get richer if I looked for and found lower prices? Should I really be looking for higher prices? Should the entire country be looking for the most expensive imports?

if the Chinese Government is employing Force (or threats thereof) to make Chinese workers sell their wares, for less than they otherwise would; then the Chinese Government is essentially enslaving Chinese in gulags, and selling "gulag goods" onto US markets.

would cheap "gulag goods" be "good" for US markets ? how would US workers compete with "slave labor" ?

"economics" is about "making" Money; Force is employed only in "taking" wealth. Force-fully reducing costs of Chinese products, and de facto dumping them, on US markets, as "stolen goods", is not "good" economics.

 

[EdwardBaiamonte]

if the Chinese Government is employing Force (or threats thereof) to make Chinese workers sell their wares, for less than they otherwise would; then the Chinese Government is essentially enslaving Chinese in gulags, and selling "gulag goods" onto US markets.

of course that is pure utter nonsense since China's growth is the greatest economic miracle in human history. Yes they sell cheap, but they get everyone to go there from all over the world with 300 years of expertise they don't have. They are growing and modernizing at warp speed x 100!!

would cheap "gulag goods" be "good" for US markets ? how would US workers compete with "slave labor" ?

more importantly how would they compete with our modern educated work force and super economy. We earn $33/hour while they earn 2
We have the comparative advantage: $33 v. 2, and that is with a whole lot of idiotic liberal policies that favor exporting jobs to China

"economics" is about "making" Money; Force is employed only in "taking" wealth. Force-fully reducing costs of Chinese products, and de facto dumping them, on US markets, as "stolen goods", is not "good" economics.

do you think the 60 million Chinese who slowly starved to death before the conversion to capitalism would agree???

 

[Widdekind]

if the Chinese Government is employing Force (or threats thereof) to make Chinese workers sell their wares, for less than they otherwise would; then the Chinese Government is essentially enslaving Chinese in gulags, and selling "gulag goods" onto US markets.

of course that is pure utter nonsense since China's growth is the greatest economic miracle in human history. Yes they sell cheap, but they get everyone to go there from all over the world with 300 years of expertise they don't have. They are growing and modernizing at warp speed x 100!!

logically, if i have not stated anything as a fact (only presented a hypothetical), then i cannot be accused of alleging "utter nonsense" as a fact -- do you understand ?

I...F... the Chinese Government employs slave labor, then etc.....

you are saying, that the Chinese willingly work "harder, cheaper" ? I...F... so, then they are more economically competitive, efficient, etc, and fair market forces would favor them

However, Stalin employed massive gulag labor, to rapidly modernize Russia, in the 1930s, at "warp speed", by which Soviets staved off Nazis; stealing assets from people (Labor, from Russians or Chinese) resembles stealing assets from earth (currently-clean air & water), and is profitable, in the short-term; it is not good economics; it is good crime; in the long-term, only economics makes more wealth, crime only destroys & transfers currently existing wealth; criminals often "Justify" their crimes, by comparisons, to other crooks ("you have to work for Stalin, 'Cause of Hitler")

our modern educated work force and super economy. We earn $33/hour while they earn 2

are US workers worth that much, or do they demand uncompetitively high wages ?? as an outsider, "Democrats" seem to say "US workers are more productive, they are worth more"; former Federal Reserve Chairman Alan Greenspan, arguing from an exclusively economic perspective, recommended importing more cheaper foreign skilled labor:

On April 30, 2009, Greenspan offered a defense of the controversial H-1B visa program, telling a U.S. Senate subcommittee that the visa quota is "far too small to meet the need" and saying that it protects U.S. workers from global competition, creating a "privileged elite"... he said more skilled immigration was needed "as the economy copes with the forthcoming retirement wave of skilled baby boomers"

I...F... US workers are worth $33 / hr., then they can competitively earn that much...
but I...F... US workers employ politics, to "go over the head of their bosses", and do "an end around the economy", to pass Laws that de facto invoke the threat of Government Police & Military, in order to coerce corporations into paying more-than-competitive wages, then those US workers have "mugged their economy" (good crime, bad economics; good on "take", bad on "make"), even as Chinese Government-corporations may be "mugging their economy" by stealing Labor from their workers

I...F... so, then Chinese Government-corporations are "taking" wealth from their workers, whilst US workers are "taking" wealth from US corporations, generating an asymmetric advantage for Chinese Government-corporations

so now what ? ::tick-tock:: ::tick-tock:: ::tick-tock::

do you think the 60 million Chinese who slowly starved to death before the conversion to ["]capitalism["] would agree???

is that the threat, that motivates Chinese workers ?