Story at Bloomberg that points out some recent rhetoric by both Presidential candidates related to trade with China.
Two of Mitt Romney’s first three television ads of the general-election campaign boast of how he’d stand up to China as soon as he becomes president.
Not to be outdone, President Barack Obama last week capped off a month during which he imposed or proposed duties on Chinese goods by warning their leaders to end unfair practices.Looks like the Romney campaign is out in front on this issue of China'a trade policy and the associated trade deficit with the Obama campaign playing catch-up.
Look for this issue to remain a key area of focus in the campaign with unemployment so high, a large part of this unemployment due to the very large US trade deficit that is not being offset with appropriate fiscal adjustments.
Unfortunately, the MMT perspective will never get through here. We import way more from China than we export to China. Thus our stores are filled with all kinds of low-priced stuff from China, and we don't have to send them a lot of real goods in return. All they want from us is dollars: electronic points on electronic balance sheets that we can manufacture for free here as often as we want, and that the Chinese seem content to hoard and are relatively uninterested in redeeming for real goods.
ReplyDeleteDan,
ReplyDeleteLooks like there is a history wrt this process.
This is from a new find in the UK:
http://www.thisisbath.co.uk/Clean-work-Bath-hoard-Roman-coins-going/story-16239673-detail/story.html
Look at that big clump of a new discovered hoard there in the archeological record from Brittannia. (need to do a post on this new one)
Then look at this:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
These two things are equivalent, although taking place in different times with different information technology available.
Currency hoarding is bad now and I'd have to think bad back in the old Empire.
Not appreciated for the harm it does today by contemporary economists and probably not appreciated for the harm it did to the Empire back then by contemporary historians... much of what you hear about wrt Roman currency is "debasement", looks like it may have been hoarding.
These ever increasing hoards represent what Tom often calls "demand leakage".... bad stuff no matter when/where it occurs looks like.
Resp,
Dan K, either this is the end of the American Empire, or not. Remember, all things change. The US and China will pursue the the policies that work for themselves, and nothing is forever.
ReplyDeleteBTW, did you see the Pentagon announced it is transferring the bulk of the Atlantic fleet to the Pacific? Then they added that it has nothing to do with China. Right.