We’ve had our industrial revolution. Our rulers now want us to have an anti-industrial revolution (part of which is environmentalism).
[quote]orion wrote:
Zap Branigan wrote:
LIFTICVSMAXIMVS wrote:
Zap Branigan wrote:
And he still won’t be up to the poor of America.
Not yet. But that’s the entire point. One day he will be. One day is family will be doing quite well because China is startinf to understand the notion capitalism – as well as all of its implications.
Perhaps, but it will not be in my lifetime or my kids lifetime. A lot can change too in that time.
You will experience massive inflation, upside down mortgages and a recession in the next 5 years.
…
[/quote]
You = the world. If you think otherwise you are whistling past the graveyard.
[quote]orion wrote:
You will experience massive inflation, upside down mortgages and a recession in the next 5 years.
[/quote]
Inflation yes, massive, no. Inflation in this case is a good thing, it is part of the market correction.
LOL! Whatever. They aren’t even close. Nobody is. The people who hate the devalued dollar the most is the Chinese, it makes the garbage they produce more expensive to export and more expensive for us to buy. They only way they can stay competitive is to devalue the yuan manually.
Consumption builds economies, saving kills them.
I used to pay 2000 lira for a cup of coffee. It really wasn’t that expensive. Inflation is a good cure for cleaning out old debts. I really don’t see the big doom and gloom bullshit. The economy cycles, that is natural. It is supposed to. But no matter what people always claim the sky is falling when a recession hits, when all that is really happening is a correction. Real estate was ridiculous and couple that with lenders giving terrible loans to people with terrible credit and you are setting yourself up for failure. It will correct, it will stabilize and the economy will pick back up.
Real Estate prices will drop and all that are getting foreclosed will be. Then with a little inflation thrown in the mix. Prices will be once again reasonable and people will start buying. Considering how fast the drop has occurred I really don’t see the recession lasting that long.
[quote]pat wrote:
Inflation yes, massive, no. Inflation in this case is a good thing, it is part of the market correction.
[/quote]
The problem is no one can really calculate the amount of inflation that actually exists. It is not a direct result that can happen just because the money supply is inflated over night. It takes time to spread out over all productive means until it is felt by consumers. The productive means see new money first.
Inflation is not a correction but rather a consequence of credit and “spontaneous wealth creation”. The correction is the bust that happens due to malinvestment and easy credit. It’s a two-fold problem.
Ask yourself, where does production come from? Do you not understand in order to produce more there is a cost? This cost is foregoing present consumption – what we call saving.
The easiest example I can think of: a farmer who wishes to increase his yield not only requires more time to plant his new crop but also requires the land, seed, water and nutrient to do so. If the land that he needs was being used to graze cattle that was used to feed his family he will require extra food to be put away until he is able to bring his new crop to market. No matter how hard he tries he cannot create food (wealth) out of thin air. He needs to save before he can expand his crops.
With out production there can be no consumption; without savings there can be no production. This is economic law.
[quote]LIFTICVSMAXIMVS wrote:
pat wrote:
Inflation yes, massive, no. Inflation in this case is a good thing, it is part of the market correction.
The problem is no one can really calculate the amount of inflation that actually exists. It is not a direct result that can happen just because the money supply is inflated over night. It takes time to spread out over all productive means until it is felt by consumers. The productive means see new money first.
Inflation is not a correction but rather a consequence of credit and “spontaneous wealth creation”. The correction is the bust that happens due to malinvestment and easy credit. It’s a two-fold problem.
[/quote]
It’s merely a reaction. There are many factors involved. A devauled dollar is one, Raising minimum wage is another, etc. Though I cannot predict the future I cannot see it getting out of control. Besides, it may sting a little in the short run, but we’ll be better for it in the end.
Of course they can. They have before and they can do it again. It bit them in the ass once or twice so they a more reluctant to pull the trigger, but they sure can and they may be mighty tempted to against a weaker dollar. It makes their goods more expensive. Combine that with the typical shitty quality of their exported goods and you have a situation where chinese products do not look very attractive to buy and are passed in lieu of other products. They don’t want that.
Your assuming they give a crap about their people. Which they don’t. They can care less if the average Chinese person can afford anything. As long as they come to work and produce.
[quote]
Orion wrote:
It all comes down to this:
Saving builds wealth, consuming, um, consumes it.
Pat wrote:
Consumption builds economies, saving kills them.
Ask yourself, where does production come from? Do you not understand in order to produce more there is a cost? This cost is foregoing present consumption – what we call saving.
The easiest example I can think of: a farmer who wishes to increase his yield not only requires more time to plant his new crop but also requires the land, seed, water and nutrient to do so. If the land that he needs was being used to graze cattle that was used to feed his family he will require extra food to be put away until he is able to bring his new crop to market. No matter how hard he tries he cannot create food (wealth) out of thin air. He needs to save before he can expand his crops.
With out production there can be no consumption; without savings there can be no production. This is economic law.[/quote]
It’s not a zero sum game. You don’t either save all your money or spend it all. All I was saying is circulating money is good for the economy. Stagnant money hurts the economy. Cuba is a good example. Despite Castro’s hatred of the U.S., the dollar is the primary currency. The peso is so unused that is has almost no value what so ever.
[quote]pat wrote:
They can care less if the average Chinese person can afford anything. As long as they come to work and produce.
[/quote]
There is no benefit to producing for just the sake of producing. If they cannot consume they will not produce. You must remember that producers are also consumers.
[quote]
It’s not a zero sum game. You don’t either save all your money or spend it all. All I was saying is circulating money is good for the economy. Stagnant money hurts the economy. Cuba is a good example. Despite Castro’s hatred of the U.S., the dollar is the primary currency. The peso is so unused that is has almost no value what so ever. [/quote]
I know it isn’t a zero sum game. Saving hurts. That’s why people don’t like to do it. Saving means forgoing pleasure now in the hope that there is pleasure in the future. Many people understand that uncertainty makes it hard to predict whether that time will ever come. Unfortunately saving is required to produce. It does not mean people need to save indefinitely in order to produce. I did not mean to imply that. It would make little sense to save and not consume just as it makes little sense to have production without some consumption.
There is a very intricate balancing act that happens in the market that when left unhampered allows – to borrow from Bastiat – Paris to get fed. Easy credit does not make it happen any more efficiently. That credit had to come from somewhere; i.e., redirecting goods from one productive means to another.
[quote]LIFTICVSMAXIMVS wrote:
pat wrote:
They can care less if the average Chinese person can afford anything. As long as they come to work and produce.
There is no benefit to producing for just the sake of producing. If they cannot consume they will not produce. You must remember that producers are also consumers.
…[/quote]
The Chinese government doesn’t give a shit about it’s people consuming. They want overseas consumers so they can get money coming in. They do not want to sell to themselves.
[quote]Zap Branigan wrote:
LIFTICVSMAXIMVS wrote:
pat wrote:
They can care less if the average Chinese person can afford anything. As long as they come to work and produce.
There is no benefit to producing for just the sake of producing. If they cannot consume they will not produce. You must remember that producers are also consumers.
…
The Chinese government doesn’t give a shit about it’s people consuming. They want overseas consumers so they can get money coming in. They do not want to sell to themselves.[/quote]
80% of Chinese production is for the export market. Half of that comes to the US; we are China’s largest single customer.
If the US consumers do not buy, China will feel it. A recession–decreased consumption–for us is a crisis for them, as well.
[quote]Zap Branigan wrote:
The Chinese government doesn’t give a shit about it’s people consuming. They want overseas consumers so they can get money coming in. They do not want to sell to themselves.[/quote]
Zap, this is way too simplistic and goes against human nature. The government may not care but the producers care. Without the proper conditions for labor they have nothing. This is a burgeoning economy and it is gaining prosperity the same way every nation has. Lots of blood, sweat, and tears.
There used to be a time when no one in China could afford an automobile. This is no longer the case – the reason why oil is so expensive too.
Trade only happens when both parties feel they are gaining more than they are giving up – in other words, China does not trade because they get money. They trade because they can get goods to consume. Money is not an end otherwise you would be able to eat it, wear it, live in it, drive it, or spend your free time with it. Money is only useful for exchanging for items that allows one to do those things.
To say that “they” don’t want to consume is very naive. That’s the only reason “they” produce.
[quote]DrSkeptix wrote:
Zap Branigan wrote:
LIFTICVSMAXIMVS wrote:
pat wrote:
They can care less if the average Chinese person can afford anything. As long as they come to work and produce.
There is no benefit to producing for just the sake of producing. If they cannot consume they will not produce. You must remember that producers are also consumers.
…
The Chinese government doesn’t give a shit about it’s people consuming. They want overseas consumers so they can get money coming in. They do not want to sell to themselves.
80% of Chinese production is for the export market. Half of that comes to the US; we are China’s largest single customer.
If the US consumers do not buy, China will feel it. A recession–decreased consumption–for us is a crisis for them, as well.[/quote]
Short term yes.
In the long run, or even after a few years, no-
To argue to China needs you to consume is like arguing that medieval serfs needed their lords to consume their surplus.
No, they didn´t.
It doesn´t evem make sense anymore to sell to you, because all you pay with are worthless IOU.
OF course the US economy will not go down unnoticed (in fact it already has gone down, it is just that nobody noticed) but what will remain is a debt free manufacturing China not an America that makes debts to consume for decades now.
[quote]Zap Branigan wrote:
LIFTICVSMAXIMVS wrote:
pat wrote:
They can care less if the average Chinese person can afford anything. As long as they come to work and produce.
There is no benefit to producing for just the sake of producing. If they cannot consume they will not produce. You must remember that producers are also consumers.
…
The Chinese government doesn’t give a shit about it’s people consuming. They want overseas consumers so they can get money coming in. They do not want to sell to themselves.[/quote]
They´ll have to.
They cannot control the market as the pressure increases. This dam will burst.
[quote]pat wrote:
orion wrote:
You will experience massive inflation, upside down mortgages and a recession in the next 5 years.
Inflation yes, massive, no. Inflation in this case is a good thing, it is part of the market correction.
That will make it much easier for the Chinese to close the gap.
If you are in your early forties you will see the Chinese running circles around the American economy.
Oooops, they are already doing that.
LOL! Whatever. They aren’t even close. Nobody is. The people who hate the devalued dollar the most is the Chinese, it makes the garbage they produce more expensive to export and more expensive for us to buy. They only way they can stay competitive is to devalue the yuan manually.
[/quote]
And again. Asia does not need you to buy you anything, especially if you are no longer able to pay. Why anyone even thinks other people need him to consume when he does not offer anything in return is beyond me.
Plus, they have lower wages, less regulations and a booming economy.
STAY competitive? Visit a WalMart.
Dangerous Keynesian BS which got you in this mess. The only thing that can make a economy grow long term is a rise in capital goods. They can only be bought from money not consumed.
Now the US might lend money to build capital goods but you do not do that, you borrow to consume which is fundamentally different because afterwards the money is gone.
[quote]
To think that the money creation fairy can change that was and always will be dangerous wishful thinking.
30 years of inflating the money supply, manipulating statistics and all the little recessions that avoided will come down like Thor’s hammer.
If I were you I would not hope for a soft landing.
I would buy real estate (should be cheap now) at fixed interest rates, and get the rest of my money out of the dollar.
When you need 100$ to buy a loaf of bread you should be able to pay back your loans easily.
I used to pay 2000 lira for a cup of coffee. It really wasn’t that expensive. Inflation is a good cure for cleaning out old debts. I really don’t see the big doom and gloom bullshit. The economy cycles, that is natural. It is supposed to. But no matter what people always claim the sky is falling when a recession hits, when all that is really happening is a correction. Real estate was ridiculous and couple that with lenders giving terrible loans to people with terrible credit and you are setting yourself up for failure. It will correct, it will stabilize and the economy will pick back up.
Real Estate prices will drop and all that are getting foreclosed will be. Then with a little inflation thrown in the mix. Prices will be once again reasonable and people will start buying. Considering how fast the drop has occurred I really don’t see the recession lasting that long.[/quote]
First of all you are contradicting yourself.
Yes recessions are a normal part of the cycle.
No, inflation is not normal and was used since the early eighties to avoid any recession so no correction occurred.
First the surplus money went into the Internet bubble than into the housing bubble, and there is of course all the money that went overseas.
All the little recessions that did not happen must happen so be ready for a giant one.
If you look at the housing bubble and the debts overseas the inflation cannot be small it practically must be ginormous if all those dollars come home.
In your case I would figure out if you are a Keynesian or an Austrian, i.e classic economist because you have the tendency to combine elements of both that are only connected trough wishful thinking.
[quote]LIFTICVSMAXIMVS wrote:
Zap Branigan wrote:
The Chinese government doesn’t give a shit about it’s people consuming. They want overseas consumers so they can get money coming in. They do not want to sell to themselves.
Zap, this is way too simplistic and goes against human nature. The government may not care but the producers care. Without the proper conditions for labor they have nothing. This is a burgeoning economy and it is gaining prosperity the same way every nation has. Lots of blood, sweat, and tears.
There used to be a time when no one in China could afford an automobile. This is no longer the case – the reason why oil is so expensive too.
Trade only happens when both parties feel they are gaining more than they are giving up – in other words, China does not trade because they get money. They trade because they can get goods to consume. Money is not an end otherwise you would be able to eat it, wear it, live in it, drive it, or spend your free time with it. Money is only useful for exchanging for items that allows one to do those things.
To say that “they” don’t want to consume is very naive. That’s the only reason “they” produce.[/quote]
You still don’t understand.
The guy who was the actual designer of the Fed wrote a book later about how what he set up was actually an instrument of manipulation — designed to allow bankers to mold the system into what they wanted. The Fed was, in philosophy and content, designed for an ‘internationalist’ agenda. In effect, the long-term development of the United States was taken over (like a coup d�??état) for the purpose of fitting the USA into a globalist system.
I’m at work now but will link it later today, unless someone beats me to it. Zap? 
I don’t understand what you guys are so upset about. When private bankers have control you say it should be government. When government has control you say it should be private.
When a combination of government and private entities has control you spin around and around. It is funny to see.
[quote]Zap Branigan wrote:
I don’t understand what you guys are so upset about. When private bankers have control you say it should be government. When government has control you say it should be private.
When a combination of government and private entities has control you spin around and around. It is funny to see.
[/quote]
The government should be a fair and honest referree, not a nanny or a tyrant. Why is it hard to see the difference?
[quote]Zap Branigan wrote:
I don’t understand what you guys are so upset about. When private bankers have control you say it should be government. When government has control you say it should be private.
When a combination of government and private entities has control you spin around and around. It is funny to see.
[/quote]
It is because you do not understand that it is not about “private” vs “public”, but about competitive systems with voluntary participation vs coercive monopolies which is very Bill Maheresque of you.
[quote]orion wrote:
Zap Branigan wrote:
I don’t understand what you guys are so upset about. When private bankers have control you say it should be government. When government has control you say it should be private.
When a combination of government and private entities has control you spin around and around. It is funny to see.
It is because you do not understand that it is not about “private” vs “public”, but about competitive systems with voluntary participation vs coercive monopolies which is very Bill Maheresque of you.[/quote]
Voluntary participation? Participate or starve is the reality of any system but you guys like to ignore reality when you build your fantasy systems.
[quote]Zap Branigan wrote:
orion wrote:
Zap Branigan wrote:
I don’t understand what you guys are so upset about. When private bankers have control you say it should be government. When government has control you say it should be private.
When a combination of government and private entities has control you spin around and around. It is funny to see.
It is because you do not understand that it is not about “private” vs “public”, but about competitive systems with voluntary participation vs coercive monopolies which is very Bill Maheresque of you.
Voluntary participation? Participate or starve is the reality of any system but you guys like to ignore reality when you build your fantasy systems.[/quote]
That is not the systems fault.
Blame God or the universe.
But, while you can choose with whom you do business with, governments, or government backed monopolies,like the Fed, always use force to make people comply.
You are using the standard socialist argument that the necessity to produce to survive (which would also exist where you the only person left on earth with no system whatsoever) is the same and even justifies forcing someone at gunpoint to do your bidding.