America has China over a barrel, not the other way around.

Good job buying the trillion worth of treasury bonds suckas.

 

I should have explained why market cap is not a good comparison of the manufacturing base.


Revenue is far better indicator of amount of goods sold than Market cap.

 

Ok Walmart have revenues of about 400 billion dollar more than 5 times what Boeing's is. Where does most of their crap come from.


The manufacturing base in America is in a very precarious position.

 

The Chinese people are resilient, they have been for 5000 years. Let me ask you a question, is the worker with the unpaid wages more able to survive under tough economic conditions than his boss who lived his entire life in luxury?

The Chinese have lost some but not all, they were able to sustain themselves AND the luxurious lifestyles of Westerners by hard work. If they sell less toys then fine, they have lived in mudhuts and strawhouses for generations and can get by with little.

You make the conclusion.

 

Do you guys want US debt to reach junk bond status just to screw China? Or default?

There are millions of Americans who have retirement savings, etc. tied up in the same debt right?

Won't we be screwing ourselves more?

BTW - who buys the EU debt? They are almost as bad as us.

 

America's production base has been shrinking for year. Cheap goods are no longer made in America; less expensive good are less and less made in America; most parts of expensive goods are no longer made in America. It's not that America doesn't have the ability to produce those cheap goods, but plants are not gone over-night, and they won't be restored and back in production over-night.

The whole RMB undervaluing thing was more political posing than real economic sense. As for Chinese holding large reserve of US treasury bonds, no, they won't dump it to the market. But what if they use all those cash to buy goods in America, and by the same time they raise the exchange rate every American seems to be so obsessed about, although they benefited a lot from that policy as well?

Right now, in Shanghai, probably chauffeurs and maids are the only things cheaper than they are in US. All the goods, you name it, housing, cars, electronics, nice clothing, nice food, everything is cheaper in America. What if Chinese use those cash to buy goods from US market? Will there be very high inflation? On the one hand you don't have that unlimited supply of cheap goods; on the other hand you have tons of cash to buy prices up. Can any vote-oriented government stomach that? What is America going to do? Forbid Chinese to buy anything? Turn market capitalism into state-controlled economy? That would be the true irony, that China becomes more and more of a capitalism.

In the global economy, everything is tied together. There is always pros and cons for every major decision, nobody can really quantify the real impact or result of such dramatic changes. Anyone tells you that if you do this and that, all problems are solved, he's lying.

 

Yes, but the chinese have been doing so since the beginning of time, it is interlaced within the culture. The closest thing America has come to is the Great Depression, which looks like child's play compared to the Great Leap Forward.

 

Some of yall do realize the writer of that article is Paul Krugman, the 2008 Nobel prize winner of economics, who teaches economics at Princeton.


New Yorker had a wonderful feature story on him recently.

http://www.newyorker.com/reporting/2010/03/01/100301fa_fact_macfarquhar

 

Why is it so?

You think he doesn't take himself seriously?

You have to respect his numbers and the conclusion.

 

you do realize Al Gore won a Nobel Prize as well.

You do realize mainstream economists have been wrong about every single part of this economic crisis since the very start.

you do realize krugman thought in 2003 it would be a good idea for America to have a housing bubble?

Krugman is just another political hack who convinces suckers to believe in him because of his academic credentials.

 

interesting post.

 

If you were to conduct a survey today, maybe 2-3 / 10 Americans are able to live in a mudhouse, whereas 6-7 / 10 Chinese will be able to last.

When the Americans have something better, the Chinese concede it (if not officially), I believe it is a given fact that Chinese people have better basic survival skills than Americans. It's the same fact that those in the Congo or Kenya are better adapted to live under harsh conditions than Chinese. These skills come from experience and the Americans have never been exposed to the conditions of which I mention above.

 

Yes, he's well-respected economist and a Nobel prize winner, but that doesn't make him Jesus Besides, lots of his NYT pieces could be politically motivated, for lots of economic discussions don't have clear answers anyways, he can spin whatever way he wants to. Didn't he serve as consultant for Enron before?

Not saying what I know worth 1% of his expertise, but he was wrong before, and he could be wrong again.

 

The irony in all of this is the Krugman position's implicit advocacy of authoritarian politics: "We have more power than you, therefore we get to declare the valuations of our currencies."

On the other hand, Krugman is right; and the "resilience" of the Chinese people is irrelevant to the question because the relevant decisions are made by the authoritarians in charge of them.

WE have more power: WE still have a bigger manufacturing base, WE have more nukes, WE have bigger dongs. Don't **** with US.

 

I thought at some point all economists won Nobel Prizes, like this "Good Citizen" award they gave every week at my elementary school.

 

dude just look at the trade deficit between china and US.. Unfortunately we lost our manufacturing base

 

+1 agreed.. let's not forget Obama won a nobel prize also..

 

I wonder if legalizing drugs would produce significant gains in national manufacturing/exporting.

 

What is your basis for saying he is wrong on his point? Let's hear it?