Classic Ricardoian will say let the efficient keep doing what they are good at, it's good for everybody. As for currency rate, China too recognizes the huge foreign reserves are problems and artificially undervalue Yuan is self-harming. Rather China wants to raise the Yuan at a pace of her choosing. I guess that's the debate.
That's the efficiency game. If that is disregarded on national security ground, I doubt mining rare earth is that hard.
According to the article it's not efficiency that is the problem, it's expertise and infrastructure. The industry analyst specifically says it's not something they can just throw money at.
^to add to that, from other articles I've read, it seems that it is the separation and smelting processes which are difficult and need expertise. So the US mine will be able to resume digging out rare earth in 2H11, but the other processes will take longer.
Gee, SamFisher, I know what this guy's qualifications are and what prize he won. I also know when the Asian Financial Crisis first hit (I am a citizen of one of those countries affected), this guy first defended the policies imposed by the IMF upon the affected Asian countries. I am sure you, being the brilliant chap that you are, know what were those policies and their subsequent effects on the economies of the affected Asian countries. You probably also know why Asian governments never trust Western economic instructions anymore, including those from this guy. As a matter of fact, we are all having a good laugh over here at American hypocrisy :grin: I read those articles previously as well They deal with the actions and policies undertaken in the aftermath of the Nasdaq Tech Bubble Burst in the US. Yes, those articles focused on some of the right points. They pointed out some of the possible repercussions that could happen because of the policies undertaken by the American government to resolve the Nasdaq Tech Bubble Burst. However, I don't see any article from him pre Great Financial Crisis talking about banks taking on trillions of toxic derivatives, on Americans over-leveraging themselves in the Hail Mary belief that their property prices and stocks and shares would keep going up forever, and on the property super bubble. Feel free to point them out to me; I don't have time to look through all the articles he wrote between 2003 and 2007. SamFisher, Greenspan was one hell of a good scapegoat for everyone and this guy to attack when the Nasdaq Tech Bubble Burst, when things like Enron and Worldcom happened. However, once again - toxic derivatives, over-leveraging, property super bubble. Did he write anything on these topics pre Great Financial Crisis? The only economist that should be listened to is Joseph Stiglitz. Paul Krugman is an intellectual lightweight compared to him. Pfffft. I don't need you or anyone else to give any weight to my credibility, I don't even care two hoots what you think about me. After all, I am not the one having negative networth, zero savings, over-indebtedness to the bank, underwater property values and no job. These are the problems facing plenty of Americans, problems that the "so-called" smartest people from the best universities in the world failed to detect, prevent, and now, correct. Correct those problems first before trying to lecture the world on what to do, LOL! Also, America has USD13 trillion in national debt? Tut tut, silly chaps :grin: BTW, when I go for business meetings in Malaysia, Thailand, Indonesia, Hong Kong, Taiwan and China, guess what's the best joke to start off those meetings. "Hey, did you read the [insert American publication here]? The Americans are trying to tell you guys how to run your economies again." Cue great hearty laughter, some snide comments on America getting a big dose of its own medicine, and the meeting gets off to a great start
1. Communist 2. Has WMD - and this time 100% proven too 3. Oppressive authoritarian government 4. Tons of human rights issues 5. Just jailed this year's Nobel Peace Prize winner 6. Takes over poor little countries that features everyone's favorite Dalai Lama 7. Gives US the middle finger 8. Looks brown and with Fox News' help, can be lumped with Muslims I must say, we do have plenty of argument for congress to declare war.
Obviously you did not. But anyway, if you *really* want to know how most economists got it wrong, maybe on one of your long flights to meet with the Sultan of Brunei or to design better anti-jumping barriers for FoxConn Workers, I've got another article for you: How Did Economists Get It So Wrong? http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?pagewanted=2&ref=paulkrugman you're welcome
I never thought it would be simple, especially if American companies allowed the Chinese to cart off much of the industrial equipment we had used to the PRC, something the US government should had prevented due to national security (a mad act that whoever is responsible should be called on the carpet for), but I also don't buy the figures of the GAO, knowing the capability of this country to ramp up production of damned near anything if it is considered a national emergency. We have done that countless times in the past.
Yes yes, whatever, O great SamFisher :grin: I don't do business in Brunei I might, however, plan soup kitchens for the unemployed and homeless in America. I bet I can hire a couple of former Harvard educated investment bankers to man those kitchens and hand out the food. Who knows, my soup kitchens might even be subsidized by American taxpayer money. And maybe I'll donate half the profits to the Tea Party.
The PRC should probably look at the example of the OPEC and the oil embargoes of the 1970's. It caused a lot of pain for a a few years but also helped to spur improvements in efficiencies. If the PRC greatly cuts back rare earth exports in a few years they might find their market share greatly diminished due to other countries stepping in to fill the void and also technological improvements reducing the need for rare earth minerals. Also lets not forget that if PRC harms the world economy by cutting off rare earth shipments it will also harm their own economy. I suspect a lot of this is just sabre rattling.
You obviously don't like Krugman, but could you give some sort of argument or perhaps facts for this statement? Krugman is all for higher labor and environmental standards in China..
I doubt China is dependent upon rare earth exports or beholden to other parties buying it when there's sufficient domestic demand into the future. Plus, they've shown a willingness to forsake short term losses in return for a long term strategic advantage, such as pegging the Yuan to the dollar. They pretty much have a 15 year window starting from whenever an "OPEC-like" event happens. Offshoring FTW. Yeah it's saber rattling, but it's a pretty big bargaining chip at the moment.
Thanks, Sam, dirty work, but someone needed to do it. I also suggest that he wikipedia Paul Krugman or perhaps google him and look at his blog.
Isn't it obvious? You have two trade spates against China at the same time, although one is of much bigger scale than the other. On one hand, China is accused of subsidizing export through undervalued Yuan. On the other hand, China is chastised for imposing a export ban on its cheap rare earth. Essentially, US saying when it comes to stuff we want to compete w/ China, albeit less efficient(Yeah, those jobs ain't coming back), we want to protect on the ground unfair advantage like currency rate, labor, environment. But when it comes to stuff US is not interested in making, such as rare earth, China can't stop making them regardless of the same problems China is accused of in the other case.
Well, Japan can spin it any ways it wants, doesn't change the facts of the case. Similarly, I've suspected for a long time that Krugman lost his mind, this just proves it. FACT: China imposed hard quotas on rare earth metals at least 5 - 7 years ago, long before some little spat with Japan, unless Krugman is telling me the CCP somehow foresaw this row years back. The reasons for the quota are very logical and numerous. The obvious being that it is exhaustible. It will run out. If you haven't noticed, the US, Europe AND Japan are sitting on massive stockpiles, NOT counting those yet to be mined domestically. Other reasons are just as logical. Ever seen it being mined? Nasty stuff. Radioactive too. For years China's environment has been paying the price. Heck, the director of the China Rare Earth Metal Research Institute went on record saying "I don't think the prices of rare earth metals are too high given the environmental consequences." Other facts neglected by Krugman (and western media in general) includs the time line: 1. China, prior to the spat with Japan, hit its annual REM export quota. The Japanese can choose to believe whatever the hell they want, doesn't change the facts. 2. Morons like Sweet Lou and Azadre haven't noticed, this is the final year and final quarter of the 11th Five-Year Plan in China. One of the goals of of the current plan was to have a greener economy and cut emissions (but pollutants in general) by 20% per unit of GDP from the previous term. For the record, I thought this was a pipe dream 7 years ago. Then the world economic crisis kinda happened. As of Q3 they stood at 15.5%. If you didn't notice, the CCP is trying kinda hard to hit the 20% target. This year alone it closed over 1600 coal mines (the kinda that flies under the radar and nobody knows about until it caves in, emits tons of waste water too), several hundred smaller older inefficient power plants, thousands of factories. Looks to me like they have 2 months to make it count. China doesn't need dirty industries like these. Unfortunately that Molycorp mine in Mountain Pass California is at least 10 years away. I'll throw in 100 bucks if they can speed it up. Lastly, like it or not, China has a monopoly on those metals. I can't think of another monopoly in another industry that exercises as little weight as China does in this case. Jack up the price and open Molycorp.
Why stop there? Why not Thailand, Indonesia, Malaysia? They certainly didn't mind much during the Asian Financial Crisis, when China could have devalued its currency and crushed their export led economies, but didn't. Apparently it's only manipulation when it doesn't benefit you, hmmm?
