China trade imbalance blamed for 2.4 million jobs lost
I have to agree that foreign free trade is in part to blame for this loss of jobs from 2001-2008. It is not that free trade is bad but we incentivize the movement of jobs off-shore and we let the cheap finished goods back into the country unencumbered. This is not totally bad, but if we are not providing retraining and more after-highschool training like vocational and college. If we do not do this to create opportunity, then these under-skilled workers are going to have jobs available to them that will lower their standard of living and create less opportunity for their children.
This is the key point that we as a society do not seem to grasp. We keep vilifying foreigners like China because its easy and doesn’t place blame on the home front but that is not the real culprit. These countries are just taking advantage of the system we have opened up to them. As long as we keep producing less and consuming goods without any thought of the actual cost, this cycle will continue until it gets so unbearable that we revolt.
Reuters – Unfair Chinese trade and currency practices caused the loss of as many as 2.4 million U.S. jobs between 2001 and 2008, according to a study released on Tuesday.
The report by the left-leaning Economic Policy Institute said China’s “currency manipulation” was a major cause of the United States’ trade deficit with China, though it said other Chinese practices contributed to the deficit.
The report comes ahead of an April 15 semi-annual report by the Treasury Department in which it must decide again whether to label China a currency manipulator. U.S. lawmakers in recent weeks have been pressuring the Obama administration to label China as such, something that U.S. President Barack Obama, like his predecessor, George W. Bush, has so far resisted.
Source: Reuters
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China alarmed by U.S. money printing
Interesting news piece from the Telegraph. The most interesting part was when Cheng Siwei was quoted with this little tidbit, “Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets.“ He was speaking to an alternative to the U.S. dollar. China is very aware of the fact that any major public gold bullion purchases would “stimulate” the markets, I read this as drive the price to the moon and some. I will close with this little interesting fact that gold as consolidated at $930.00/oz. during the traditionally lower demand part of the year. Unless we see a major correction tomorrow morning in the New York Spot market, I predict we will finally see gold bust through $1,000.00 per ounce. Does the smart money know something the average joe doesn’t? Likely in my opinion.
Telegraph, London - Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”. “We hope there will be a change in monetary policy as soon as they have positive growth again,” he said at the Ambrosetti Workshop, a policy gathering on Lake Como.
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Video: Rep. Mark Kirk says China may be purchasing $80 billion in gold bullion to increase reserves
Editor’s Note: Admittedly, Fox News is not my favorite news organization. This video of an interview on Fox is pretty good and Republican Representative Mark Kirk from Illinois gives a pretty solid perspective of some of the debate that are happening in Washington and globally about the U.S. dollar and China as our largest creditor. The omission that China is going to buy $80 billion in gold bullion says a lot about their inflation expectations in itself. To put that into perspective, if you purchased that amount a current price ($920.00/oz.), that would equal 2,717 tonnes of gold bullion. According to the World Gold Council, that would outstrip an entire years mining production for the entire globe. If that is not some indication about our current situation and what is expected for inflation, than what else do we need? Enjoy the video.
Video:
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China positioning its currency for a run at world supremacy by 2020?
In my opinion I do not see the dollar as the “only” dominant currency by 2020 either, with China, India and Brazil working hard to provide employment and raise the standards of their people, to accomplish this, they will need to provide stability and that will make those countries more attractive to invest in and that is the biggest reason people invest in the dollar. If we were more responsible with how we handled our currency, we would not hear these calls as loud as we do in these current times. It will be interesting to see how this plays out.
News (LA Times):
Reporting from Shanghai — Could the world’s currency of choice have the face of Mao Tse-tung on it, not George Washington? Quixotic or not, the Chinese are preparing for that day.
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China calls for new global currency to replace dollar
The calls for a replacement to the dollar is getting more pronounced everyday. China has really pushed for the IMF to use SDRs (Special Drawings Rights) as the super-sovereign currency used between governements. I am not in favor of giving any international agency this type of power. When you concentrate power, it makes it much easier to abuse.
I understand why the call for these changes are coming, being that we are the de facto reserve currency, our domestic monetary polices are devaluing the dollar. We should not look to bailout and look more to preserve our currency on the world market and let the market take care of the mal-investment.
News (AP):
China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.
The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing’s growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.
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Chinese cautious on Treasury Notes
I wonder why, maybe because we are going to issue between 2-3 trillion dollars worth this year and we are still not sure if that is even going to solve the current credit & confidence problem?
News (Reuters):
China’s willingness to continue buying United States Treasury securities in large numbers will depend on its need to protect the value of its foreign investments, the Chinese premier, Wen Jiabao, said Saturday. He also said that a stable yuan is in everyone’s interests.
“Whether we will buy more U.S. Treasury bonds, and if so by how much — we should take that decision in accordance with China’s own need and also our aim to keep the security of our foreign reserves and the value of them,” Mr. Wen said.
His enigmatic remarks, made near the end of a visit to Europe, could raise new concerns about China’s commitment to continue purchasing United States government debt.
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China losing taste for debt from U.S.
It is not just China that is losing their appetite for U.S. sovereign debt, its basically the whole world that is fed up. The world is not going to sit back with all its problems and fund us to be the consumers of the world. That is not the path to global prosperity.
You don’t have an island with a bunch of people with limited resources and then assign one guys jobs as the person who eats. It makes no sense and it won’t stand my spotlight or public opinion over time and that is what counts.
News:
China has bought more than $1 trillion of American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers.
The declining Chinese appetite for United States debt, apparent in a series of hints from Chinese policy makers over the last two weeks, with official statistics due for release in the next few days, comes at an inconvenient time.
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