Tuesday, October 27, 2020

USD/CNY

 

Trump happy:





51 comments:

Tom Hickey said...

Watch all the people that were screaming Chinese currency manipulation switch to moaning about US dollar weakness.

Matt Franko said...

Won’t be Trump Tom....

Matt Franko said...

There was a question at last Thursday debate about trade deficit.... Biden hit Trump something like “trade deficit has increased!”...

Trump got pissed and snapped “every time they devalue their currency we are making money...”... then he said he was giving the munnie to the farmers...

Something about how he said it made me think he sounded like he was talking about a forex hedge.... like he has us positioned bearish the CNY... so he is short the CNY and when they devalue he takes profits and gives the munnie to farmers..,,



Matt Franko said...

https://www.reuters.com/article/us-usa-trade-currency/u-s-treasurys-currency-report-likely-delayed-until-after-election-sources-idUSKBN2782MX

Then he is withholding this forex report now...

Greg said...

Yeah

I wanna hear Trump go out in his stump speeches and start telling his folks to start chanting “Dollar weak, America strong! Dollar weak America strong!” That would be fucking hilarious

Don’t give me any fucking lectures about US$ vs Chinese cuz those morons don’t have the capacity to separate that. They all want a “strong dollar”...... they think....... but they also want imports to be the “ more expensive” option relative to “made in america” , and they want “good paying jobs” which means a higher cost of labor....... and they want stock portfolios rise continuously which our corporate overlords can only achieve by lowering costs ( which is ALWAYS wages .....hmmmmmmmm). It’s gotta be tough being a conservative and insisting on 4 mutually exclusive conditions.......... I guess that’s where the magical god comes in!!! Explains white angst I guess. Mick Jagger told you guys. “ You can’t EVER get what you want”.

Greg said...

Didn’t see your comment Tom. For some reason I only saw Matt’s, but you beat me to the gist of my comment

HILARIOUS!!!

Tom Hickey said...

Matt, if Trump knew anything about international trade, he would have known that net imports are a real benefit and that the US was using its extraordinary privilege to have Chinese workers working for Americans for essentially nothing but some keystrokes on the Fed's balance sheet.

Of course it cost American jobs, but that's just capitalism. The answer was to create more US jobs instead of wasting productive resources. But US workers are not priced low enough yet for that.

DJT, his Treasury secretary, and trade czar are clueless about what really happens in international trade because they are looking at numbers on income statements and balances sheets rather than real goods. And those numbers — Treasuries — only exist in China's account on the Fed's balance sheet. You couldn’t ask for a better deal. It's a lot better deal than China exchanging real goods for real goods. In reality, it's costless.

Oh, and now that the jobs the US firms exported there are leaving China, are being exported to other low wage countries as one would expect from firms operating in a global capitalistic environment. They are not coming back to the US unless US wages fall to lower levels, benefits and protections cut and environmental regs removed. Again, that's just capitalism.

Matt Franko said...

He has China doing what he wants.... they have it well back below 7.... which is where he wants it...

I think (somehow haven’t exactly figured it out yet) he has us short USD above 7....

Matt Franko said...

I don’t agree with any of that Tom..,

You guys are all Art degree people who don’t do anything materially productive...

If you are a material productive trained person you want to make stuff... trump is targeting that cohort...

We’ll see...next week...

Greg said...

He’s probably got Mnuchin creating a side acct , completely on the sly, and is playing the currency markets with “taxpayer dollars”. Wouldn’t put it past the scum bag.


“Trump Happy”


For the next 4 seconds, until he sees that some Fox News talking head didn’t lay fully prostrate before his excellency

Greg said...

“You guys are all Art degree people who don’t do anything materially productive...”


Wow Matt! I’m proud of you! It only took you nine comments to bring up Art Degrees....... that’s progress, and of course completely irrelevant

Matt Franko said...

Btw China in food shortages:

https://www.washingtonpost.com/world/asia_pacific/china-food-shortage-clean-plate/2020/10/02/578daa0e-0223-11eb-b92e-029676f9ebec_story.html


China in there with strong buying:

https://kdhlradio.com/china-buying-u-s-beans-corn-pork-beef/

Getting a better deal with a weaker USD/CNY...

Matt Franko said...

You’re cognitively biased against material production via your Art Degree training.., ... don’t understand it or the people who want to do it..,

We don’t care if you guys want to finger paint all day knock yourselves out .., just leave us alone...,

Matt Franko said...

“He’s probably got Mnuchin creating a side acct , completely on the sly, and is playing the currency markets with “taxpayer dollars”.

Maybe not exactly but something like that... I’m looking... only 10s of $Bs amounts so won’t stand out too much....

Matt Franko said...

I think he has Fed maybe doing it....

Or maybe it was figurative language that I am reifying... like “Mexico is going to pay for it” (wall) ...

Tom Hickey said...

Yes, Matt, we know. 5D chess.

Matt Franko said...

He’s not going to tell you what he is doing Tom...

Everything that comes out of his mouth is to work somebody.... EVERYTHING.....

Matt Franko said...

“5D chess” is figurative language ...

He’s manipulative....in literal language...

I’ll settle on his results thanks... no wars, employment up... had a good healthcare proposal... etc...

I don’t care how he gets it done..,, as long as he gets it done...,

Tom Hickey said...

Yes, he has amazing godlike powers.

Matt Franko said...

Look im concerned for you guys if he wins next week don’t take it cold turkey... like you can tough it out... get some professional psychological counseling...

If he loses I’ll figure it out and make necessary adjustments in 5 minutes...

You guys may be jumping off bridges..,, promise me youlll get counseling... IF he wins...

Tom Hickey said...

no wars

The US is still engaged in several wars, and some that little is known about, e.g., in Africa, not to mention covert operations with plausible deniability. Very little has changed under DJT. And he is a first-class bully up front. The rest of them are polite about it. At least DJT is not hypocritical.

In addition, the US is marching the world toward WWWIII. If he wins, I would be surprised if the initial skirmishes at least don't start in his second administration.

Unfortunately, pretty much the same with Biden, since pretty much the same people are behind both. But I have to say that Mike Pompeo is hard to beat as a bull-in-a china-shop warmonger. Whoever Biden would choose would at least be subtler about it.

Greg said...

“.. had a good healthcare proposal... etc...”

Recite it. What was his proposal? You can’t name anything past a 200$ gift card for seniors to use on drugs


“You’re cognitively biased against material production“

WTF does that even mean....... we are in to virtual production?..... mirages? Mirage sounds like Trumps health care plan and his peace deals with countries that weren’t even at war

Greg said...

“Everything that comes out of his mouth is to work somebody.... EVERYTHING...”


You do that too much you end up not being able to keep up who you are working, and whether the actions you are taking now to work.... Guido......end up going against what you were trying to do to work.......Joey. You can’t spend your life working everyone because not everyone else has their goals aligned.

Matt Franko said...

“ net imports are a real benefit ”

Yo they are priced in currency units that can be adjusted in exchange rate by the banks... Ever take a Science course? Did the units change?

This is another MMT Art degree brain fart thesis that you are brainlessly regurgitating like a good Art Degree zombie person....

If we had FIXED exchange rates USD/CNY at 1:1 and THEN had net imports in financial terms THAT would represent a net REAL benefit....

You’re as bad as the “free market!” zombies meanwhile there is a global cartel fixing the price of petroleum...,

Tom Hickey said...

Matt the only difference that currency makes is if it is exchangeable for a real good like a PM at a fixed price. Otherwise it is just numbers. It's a money illusion that obscures what is really happening at the level of exchange. Net real goods wins over net keystroke every time. If the keystrokes remain in accounts, the exchange involves free goods. Look at outcomes.

Matt Franko said...

He had a $400/mo advanced refundable tax credit into a HSA for any uninsured US person.... Not including Medicare...

So 0 to 64 no insurance you got $400/mo to get insurance...


Maryland has 5.8m pop.... 84% under 65... leaves 4.9m under 65....

$400/mo x 4.9m people = 2B/mo = 24B/yr...

I think Johns Hopkins and UMD Medical systems could split it 12b each and take care of the 0-64 cohort ....

Checkmate.... again....

Tom Hickey said...

You changed the subject. This is about USD/CNY and trade implications.

What it means is that Americans will be paying more for Chinese exported goods. China gets USD that "worth less," but already they are "worthless" to the Chinese other than as foreign reserves so the US can't squeeze them.

Matt Franko said...

UMD has ONLY heart surgery and level 1 trauma in entire state.., It’s regulated that way... Hopkins has specialty medical...

30 medivac helicopters at Andrews AF base Annex are dispatched immediately to accident sites and 15 min helo flight to roof in Baltimore... unless you are in the boonies in panhandle or eastern shore .... if you need heart surgery you have to drive to Baltimore... 30-45 minutes if there is no traffic...

We have good care here via those 2 main systems ..,, both university systems.,, if everyone paid them $400 on the 1st of the month they could take care of it all...

This was trumps plan...

Matt Franko said...

“ but already they are "worthless" to the Chinese other than as foreign reserves so the US can't squeeze them.”

Yo What are they buying the food with? Fortune cookies?

Tom Hickey said...

China is not dependent on the US for food. Trump had to force them to buy US food and oil, which they can easily get elsewhere on trade, or non-USD transactions. Russia and Brazil to mention two major suppliers.

China doesn't want to decouple from the US but they are prepared to do so if that is what the US wants.

Matt Franko said...

Let’s see what happens if trump takes all their USDs as comp for covid.... then we’ll see how much they value them....

Matt Franko said...

You have to balance the trade Tom...

These corrupt nations just can’t continue to accrue unlimited amounts of foreign claims ad infinitum...

This is like your bitching about “inequality!” all the time...

Matt Franko said...

I have this friend in Ag feed Tom...former Doctoral candidate UMD in Ag... undergrad Biochemistry, etc...

He says if we think we are going to get to 9B (from current 7B) then US going to have to produce ONLY corn... Brazil ONLY beans.... Russia/Ukraine ONLY wheat... or it ain’t going to happen...

These foreign claims have got to go sorry...

Peter Pan said...

Trump circus is nearing the end of its run. Don't forget to switch off the lights, Matt.

Peter Pan said...

Tucker Carlson Tonight 10/27/20 FULL SHOW - The Bobulinski Interview
https://youtu.be/xaNXDq9LsdA

Tom Hickey said...

You have to balance the trade Tom... These corrupt nations just can’t continue to accrue unlimited amounts of foreign claims ad infinitum

Why not?

And if they do, it benefits the parties getting real goods from them for keystrokes.

It is rather foolish of countries to collect keystrokes that without good reason, but in a USD-dominant global economy, it is prudent to keep a store of foreign reserves. But Gold can be substituted for the reserve currency, as Russia has done, and China too. And with the USD falling holding gold rather than US tsys is a good hedge.

Gold is still the ultimate reserve as the de facto numeraire if not de jure. In a sense, energy reserves are also a numeraire, and a lot more real (practical) one that PMs. IN fact, oil is used to settle in some cases (Venezuela, Iran) to avoid the financial payments system owing to sanctions.

Tom Hickey said...

Let’s see what happens if trump takes all their USDs as comp for covid.... then we’ll see how much they value them....

I would say rather, let's see what happens to the USD if that happens.

Matt Franko said...

“These corrupt nations just can’t continue to accrue unlimited amounts of foreign claims ad infinitum. Why not? “

Well how do you square that thinking up with you saying we can’t let these wealthy people accrue all this wealth here in US?

Same thing... only worse because the surplus nations are accruing wealth in a nation that isn’t even their own... Which I cannot understand hence I create the figurative “USD Zombie” figure of speech...

At least the working people in US can shop at Walmart and get a good deal from scale economies at the mega retailer... , even though they may not have any shares in Walmart....

What do the working people in China get ? An extra ration of dog brain soup at the trapeze net factory?

No wonder they all want to move here...,

Matt Franko said...

“I would say rather, let's see what happens to the USD if that happens.”

Yo That’s the plan...,

Peter Pan said...

If Walmart wants to import stuff from China, it's none of the government's business.

Tom Hickey said...

Yo That’s the plan...,

De-dollarization and gold repatriation? Who knew?

In fact, I expect to see Germany repatriating its gold stash in the US any day now.

Tom Hickey said...

Well how do you square that thinking up with you saying we can’t let these wealthy people accrue all this wealth here in US?

Because domestic wealth gives political power that undermines democracy by replacing it with plutonomy. Citi bank even wrote a report on this.

Conversely, foreign government holds of USD give them zero power of the US, contrary to the widespread myth (false belief) that China has the US by the short hairs.

China does have the US by the short hairs for another reason. It has about four times the population and although the world's largest economy figured by PPP, on other measures it is only 30% developed relative to the US. At anything close to the current pace of development, China will soon leave the US in the dust economically and militarily. This is why the US elite is freaking out (they are not saying this publicly yet, but rather preparing the country for war).

"Left behind" takes on new meaning.

Matt Franko said...

That’s trumps plan ... if he gets re-elected he’ll continue to pursue it...,

We don’t want these foreigners having our munnie... let them get their own munnie.... f these foreigner usd zombies....

High tariffs and import bans.... munnie stays here....

Tom Hickey said...

What do the working people in China get ? An extra ration of dog brain soup at the trapeze net factory?

No wonder they all want to move here...,


Apparently you read only propaganda. Over 90 of the Chinese people give their government good marks because their material position as improved so much owing to their policies. Same with Putin. He turned the place around.

The US? Most US workers are either stagnating or falling behind as the American dream winds down into a renter's society (which btw is the plan). The result massive social unrest and a near civil war situation, which the US elite is wishing on China and Russia.

Matt Franko said...

No I don’t read propaganda I walk around and travel around and see all the Asian immigrants....

They all want to get out of that hell hole.... and I dont blame them....

Tom Hickey said...

No I don’t read propaganda I walk around and travel around and see all the Asian immigrants.... They all want to get out of that hell hole.... and I dont blame them....

I don't know what your neighborhood is like but here in Iowa City, home of University of Iowa and about 3000 Chinese students, they drive around in expensive cars and dress very fashionably. A student bought the 5 bedroom house with a pool across the street and then sold it when he graduated and went home.

Are you sure that those immigrants aren't from some place like Vietnam?

Tom Hickey said...

Oh, and that Chinese student's name was Plato. Not kidding. Chinese people often takes Western first names for the West since we mangel the Chinese pronunciation of their real names so badly.

Peter Pan said...

According to Matt, Chinese students are here to steal our technology.

Greg said...

Looks like Matt also thinks all international trade should just be barter.


Yo Matt, you do realize that all munnie stays within the banking system, which is pretty much fully integrated. Except that which is kept in cash, a small % in overall scheme. Munnie doesn’t leave the country. Munnie can’t travel. It just has different names next to different numbers followed by a different symbol, within different banks that are trading with other banks all the time. Those banks have a neat little thing they do which gives them a readily available means of changing a symbol(from £ to $ maybe) while changing the number slightly. It’s all quite understandable by most 7th graders.


“These corrupt nations just can’t continue to accrue unlimited amounts of foreign claims ad infinitum. Why not? “
Well how do you square that thinking up with you saying we can’t let these wealthy people accrue all this wealth here in US?”

Wow!! You really are losing it Mattie boy. Using the same “Govt is like a household” misguided thinking to assert that nations are just like wealthy people............ smh

Tom Hickey said...

Looks like Matt also thinks all international trade should just be barter.

Some thoughts on international trade.

Yes, balanced trade would be in effect barter where munnie can be considered a veil. But when munnie is involved, there is always a money illusion introduced, e.g., in terms of monetary regime, exchange rates, interest rates, etc.

But abstracting from that and considering trade in terms of barter, ideally balanced trade is preferable owing to increase efficiency of productive resources in terms of comparative advantage.

That that is in only in an ideal system, that is, in the possible worlds of models.

In the real world, munnie adds flexibility. A country can defer purchases if it chooses by saving, or it can use a reserve currency in order to trade with countries other than the reserve currency issuer. A monetary basis of trade offers more options than barter.

In the end, economists generally agree that net imports are a real benefit and net export as financial benefit. In the days of the gold standard for international trade, this meant bartering gold for goods. That is no longer the case and now it involves accepting keystrokes at the central bank of the importer for future use either in settling trade using that currency or exchanging the currency for other currency with those that desire to save in it or use it for trade.

In between exchanges, the currency (other than cash) is saved where it lives, on the books of the central bank of the issuing country (but see Eurodollars).

But a world in which supply chains were balanced there would be greater efficiency taking transaction costs into account. That would be a world in which trust is much higher than at present. Now nations are increasingly adopting self-sufficiency and are willing to sacrifice efficiency (and financial cost) to do it.

Then there is also economic warfare.

So, it is complicated.

Greg said...

Good comment Tom

Here;

“In between exchanges, the currency (other than cash) is saved where it lives, on the books of the central bank of the issuing country (but see Eurodollars).”

This seems to agree with me that money doesn’t leave anywhere. The dollars that have “China” attached to them are right here within our Federal Reserve system. The idea they’ve gone anywhere is scare tactics and the idea that their possession by someone else is depriving Americans of something is totally absurd

I couldn’t agree more with your observation about a world with greater efficiency requiring trust. I don’t think Trump and company care about trust, if you have enough power it doesn’t matter if your trusted. That’s not how they navigate through relationships. It’s not mutual trust you seek it’s having the leverage to get what you want. Of course that type of strategy doesnt work for long run but you can win a few battles
Seeking relationships of mutual trust require something of the Trumpsters they can’t deliver.