View Poll Results: Has free trade been good for the United States

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  • Yes

    13 39.39%
  • No

    20 60.61%
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Thread: Has free trade been good for the United States?

  1. #61
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    Re: Has free trade been good for the United States?

    Quote Originally Posted by MildSteel View Post
    They have already been repatriating cash by buying US Treasuries. The US has around 120 trillion dollars in unfunded liabilities, if my memory is correct. Therefore they don't want more of those. Maybe they could buy ExxonMobil and JP Morgan Chase, but that still would not absorb the access. Not only that, it does not solve the fundamental difficulty that I mentioned. At the end of the day, all the Chinese can buy with US dollars are dollar denominated assets. The Federal reserve has control of US currency and it can therefore devalue it. That's the problem.
    Great devalue it so chinese products are more expensive and it's cheaper to make things in the US.
    Islam is an antiquated religion and needs to either modernize with the times or be completely eradicated.
    There are two types of Muslims, terrorists, and their enablers. They need to fix that if they want to be part of civilized society.

  2. #62
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    Re: Has free trade been good for the United States?

    Quote Originally Posted by MildSteel View Post
    They have already been repatriating cash by buying US Treasuries. The US has around 120 trillion dollars in unfunded liabilities, if my memory is correct. Therefore they don't want more of those. Maybe they could buy ExxonMobil and JP Morgan Chase, but that still would not absorb the excess. Not only that, it does not solve the fundamental difficulty that I mentioned. At the end of the day, all the Chinese can buy with US dollars are dollar denominated assets. The Federal reserve has control of US currency and it can therefore devalue it. That's the problem.
    Buying Treasuries is not repatriation. It is the opposite. Repatriation requires exchanging in this case Dollars for Remimbi. That would weaken the Dollar and reduce the competitiveness by making American labor comparatively less expensive and Chinese goods more so. That is the corrective mechanism of free exchange.

    If you do not do this, the economies grow in manners that are sub optimal, the price of labor in the US for instance must either fall or jobs must be cut, large hordes of cash build up like the pile of Treasuries you mention and the stability of the global system turns brittle.
    Last edited by joG; 04-25-14 at 04:50 AM.

  3. #63
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    Re: Has free trade been good for the United States?

    Quote Originally Posted by joG View Post
    Buying Treasuries is not repatriation. It is the opposite. Repatriation requires exchanging in this case Dollars for Remimbi. That would weaken the Dollar and reduce the competitiveness by making American labor comparatively less expensive and Chinese goods more so. That is the corrective mechanism of free exchange.

    If you do not do this, the economies grow in manners that are sub optimal, the price of labor in the US for instance must either fall or jobs must be cut, large hordes of cash build up like the pile of Treasuries you mention and the stability of the global system turns brittle.
    Actually they do that. It's just that they go out and buy US currency on the foreign exchanges with the printed money in order to keep the currency pegged. That's the problem. It causes inflation over there because of the excess printed money. What should be happening is that we send them an equal amount of goods in exchange for their goods. But we shipped all the manufacturing over there, so all we have to trade is dollars.

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    Re: Has free trade been good for the United States?

    Quote Originally Posted by MildSteel View Post
    Actually they do that. It's just that they go out and buy US currency on the foreign exchanges with the printed money in order to keep the currency pegged. That's the problem. It causes inflation over there because of the excess printed money. What should be happening is that we send them an equal amount of goods in exchange for their goods. But we shipped all the manufacturing over there, so all we have to trade is dollars.
    I know of no way you can sell large amounts of currency, or within narrow limits and under very special circumstances reducing the interest rate without impacting the exchange rate. Maybe you would like to elucidate the mechanism you mean?

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    Re: Has free trade been good for the United States?

    Quote Originally Posted by joG View Post
    I know of no way you can sell large amounts of currency, or within narrow limits and under very special circumstances reducing the interest rate without impacting the exchange rate. Maybe you would like to elucidate the mechanism you mean?
    I'm sorry. I think what you meant is that they should go and buy yuan on the foreign exchange market. I was thinking printing yuan.

    If that's what you mean, and I think it is, then that's the same problem, it drives the value of the dollar down and the yuan up, which means their exports become more expensive.

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