Move over, Karl Marx. Roll over, Beethoven. Get outta town, Nostradamus. The long awaited Monkifesto is now available for the first time on the intarweb:
If you want the Monkifesto in a nutshell, here it is:
Pax Americana is drawing to a close.
Pax Sinae is here:
Any country that relies on economic or military support from America to survive now beter start pleading their case to the Chinese before it’s too late.
Hmmm. In a nutshell. That makes some sense. But let’s just say that it’s a bit . . . paltry. So much to be anticipated for monkyboy. What is he advocating? What does he earnestly desire?
Racism: Oh, no, the Chinese have never been accused of this.
Imperialism: Never mind Tibet.
Plutocracy: There are no class differences in China.
Freedom of Conscience: Which is why the Falun Gong are such ardent organ donors.
Separation of Church and State: The State is the Church, silly.
Freedom of Expression: No more crackdowns on criticism of those in power.
Freedom of Association: So long as the authorities don’t mind.
Genocide: It was necessary to make our great leap forward.
Capitalism: For the well connected.
Collective bargaining: Hahahahaha!
Freedom of the Press: Yes, but only the government press.
Capital punishment: Mobile execution buses. That’s service.
Habeas corpus: Huh?
monkyboy, for one, welcomes our enlightened future rulers. How could a Pax Sinai possibly be worse than what we’ve got?
But wait! Not surprisingly, someone who does know something about economics, Gerard Baker of the Times of London, disagrees with monkyboy’s assessment:
The real question about American power is whether the realities that underpin it are shifting. There, I’m afraid, the news for Americaphobes is grim. The US economy continues to grow at a pace that far outstrips its rivals in the industrialised world. Though China is growing at three times the pace of the US, America’s economy is so large  $12 trillion annually  that , even in the unlikely event that China will continue to grow at its current rate, it will take 30 to 40 years to catch up with America.
Despite the heated rhetoric, the US is not going bankrupt  its fiscal deficit is falling and its accumulated debt is easily manageable. Compared with most other advanced economies, its demographics look indecently healthy. This month the US population passed 300 million; it will be 400 million in less than 50 years, and still relatively youthful.
If you want to understand the real enduring strength of America as a nation, look at the Dow Jones industrial average. Not the record 12,000 level reached this month  that may last no longer than a day or a week. Look instead at the 30 companies that make up the Dow index. Only two of the original 30 companies in the index in 1930  General Electric and General Motors  are still there today. Most of today’s Dow components  the Microsofts and Intels  weren’t even around 50 years ago.
If you look at the relevant stock market indices for Germany, France or even Britain, you will find them dominated by companies that have been around for generations. America by contrast, has mastered the art of creative destruction. This vast competitive openness, combined with entrepreneurial spirit, keeps the country constantly innovating and regenerating.
Long after Iraq has established itself as some kind of punctuation mark in American history, America’s genius for renewing itself will surely have the last word.
But why listen to him? Gerard is such a ludicrous name.
More bad news for China: 60 Million Chinese Are Considered Obese
Geppetto: “Hey! You leave-a my monkey alone-a!”
Well hell. When I read that I thought he was talking about the emergence of Mount Sinai out in the Egyptian desert. I thought maybe Moses was making a comeback. And establishing a new monkeyphate.
Monkeychild probably doesn’t REALLY love the ChiComms, he just really, really hates the US. Thus, China’s gain = US’s receed. In that sense, he’s remarkably like France and the EU.
It’s all great fun untill the pograms start………
I for one welcome our Chinese overlords.
They got lousy military surplus. Screw em.
The Chinese are going to take over the world by making billions selling U.S. flags to fly over the capitals of the Middle East.
And a few to sell to the flag-burners of course.
That’s very funny, Dan.
My fave…
heehee.
But I hate to post things that will beckon monky.
He puts everyone in a bad mood, and we all know darn well he’s not listening.
Dammit Dan, monkyspunk was only pointing out that practicality beats principle two out of three falls.
Then you had to go all practical on his monkybutt.
I see nothing but raw nerves here. The monk has hit the cortex, and you are reacting with fury and spittle. I don’t agree with him/her half the time, but I encourage any antimagnetic crap.
Plus, lunarpuff’s kind of twee. No offense, but take a side.
Fury and spittle? Christ on a crutch dude, how humorless are you?
Monkyboy likes to put his legs on the table and let his ass do the talking. I bet he’s one of the numbnuts out there who thinks China completely services the U.S. debt. Notice how he thinks (no,believes) the U.S. is less safe because of the Iraq and Afghanistan battlefronts without specifically explaining why (Nevermind that there have been no attacks on American soil nor on any U.S. embassies as opposed to the Clinton salad days.). He wants the U.S. to disengage from the rest of the world and stall international commerce by searching all shipping containers. He wants lecture us on what works and what doesn’t work?
Just a small addendum:
I don’t welcome China’s rise to power.
I still think there’s a chance we could compete with them instead of just relying on them for loans to keep our anemic economy from collapsing.
I say we shoot the messenger.
Of course he can’t expound on this notion, it’s part of his secret plan to rule the world, you see.
BWAHAHAHAHAHAHAHAHA!!!!!!!!!!!
Kind of twee am me?
Thank god you’re more articulate, cynn!
I don’t agree with much of the monk’s assertions, but what is actually wrong with the idea that we are over our head with wealth transfer to China? Anyone? I’ve been outed as a moron here, but would really like an answer.
Well, I am no economist, but I would venture a guess that your reliance in plush toy manufacturing as a leading indicator of economic strength sort of refutes your understanding of the new world order.
I dont’ think the problem is that they’re making plush toys (they’re making much more). I think the problem is that they’re making what we want and can’t afford. Thus, they loan us the money to buy what they’re selling. We’re promising them our future production in exchange for their present production. And eventually it will come due.
Sockpuppet, say it ain’t so.
Are you trying to tell me that Beanie Babies and little nylon American flags sold in 7-11s all over this land are not driving the econonomy?
Blasphemy!
What the hell are your referring to?
Lunarpuff, don’t forget about the novelty baseball caps.
BTW, just how much of our debt does China hold? I’m way too lazy to check.
monkyboy, which country owns the most of the U.S. debt?
I decided to look up the debt thing. It took ten seconds. I wasn’t all that surprised.
Then again, I’m assuming Wikipedia is correct, which may not be all that good an idea.
Try this, and this.
Heh…
http://www.treas.gov would be a better source cranky-d.
Thanks mishu. If it doesn’t turn up at the top of a google search, I rarely see it.
BTW, wikipedia apparently lowballed the debt a bit, or perhaps left some dept off. But the proportions they reported were correct.
Well, come on mishu, give!
Who owns the most US debt, and where is China on the list?
Japan holds the most. China holds a bit more than the Cayman Islands.
look here and here
I liked the one about how nothing ever gets discarded.
Heh heh. I’m waiting for monkyboy. I will tell you this. It’s so obvious you don’t even think about it.
Sorry for letting the cat out of the bag, mishu.
Actually, the U.S. dwarfs Japan’s and China’s holdings. It’s a trick question.
So does the UK. Methinks those cayman islanders holding the money there aren’t really living in the cayman islands.
Yeah, I’m too lazy to look up alot of this stuff also.
But it seems to me if we’re buying all sorts of crap from China (and we are) they’re rather beholden to us. We can buy cheap crap anywhere.
Here in LA, I go to Olvera St. Even cheaper than TJ, and you save on gas.
China stands to lose more in any trade war. They are heavily dependendant on exporting cheap crap, but if western countries are feeling a pinch, or feeling like they should be supporting comapanies and trade that play fair, well guess what?
Western coutries have plenty of opportunities to buy according to their conscience. China cannot export this at all.
I’m not worried.
B-b-but I was looking forward to our Zionist Overlords!
On the other hand, Japanese chicks are pretty nice. Well, while I’m there I’ll let you know how the other half lives.
Rice Wine might be one of my poisons, though…
I say, what’s sauce for the monky…
Where’s the actifesto? Not that he would ever take a position he didn’t think he could dissemble away, of course.
The Chinese are moving up in the world. They have a big army, blue water capability, surging economic power, and they want to have total control over the South China Sea at a minimum. Okay.
Should we expect them to be taking over Guam, Hawaii, Australia and Japan anytime soon? I doubt it. They may buy big chunks, but the only country that is really in their cross hairs right now is Taiwan and, of course, any oil found near the Spratleys. Come on, come up with a better name. Pax Sinae, Sinai, whatever. How about Chinese Takeout Peace, Column A?
1) Take a science class before tossing out the verbiage.
2) No drinking before posting.
As for Simorectalinverticus, you guys must be well and truly bored to encourage one of the most definite examples of trolldom to ever exist.
When are you going River?
How long are you staying?
We can’t afford Chinese exports? Holy fuck! It’s much worse than I thought!
Just wait until the monky calculates the ginormous trade deficit he has with his local grocer. And that’s the food he must buy to live!
That’s a rule?
Shit!
Guess I can’t post here anymore…
Mishu, I thought you meant foreign debt, and that it was understood that most of our debt is held by people living in the U.S.
Wrong again…
Godammit!
This is the sort of rule that should only be posted before noon.
Not now!
I thought the if you’re a liberal part was implicit. Issues of marginal self-control and all…
Well. I seemed to have missed the part about ”if you’re a liberal”. Sometimes, I’m too lazy to scroll.
But I totally trust the ABA.
And the marginal self-control?
Hmm. Still trust you, but can I get back to you on that?
Hey actus and monky – I have a couple of words of caution for you… “Paul Kennedy”.
I read “Rise and Fall” a long time ago. But I dont’ see what the ‘word of caution’ is.
Can we go back to that bit that Ric Locke wrote—linked earlier—about how nothing is ever discarded. That seemed like a good economic plan.
If I had to avoid drinking before posting or commenting, I wouldn’t do much of either.
The real wacky stuff appears some time after a few lowballs of Jameson. However, I’m out, so any output tonight will almost be rational.
Dammit, Major J.–I haven’t posted in a long time and you beat me to the Paul Kennedy punch.
For all the gnashing of teeth over the rise of China:
1. 800 million rural peasants. Think about that number for a moment.
2. Seriously, think about it.
3. Want to know why the PRC hasn’t invaded Taiwan? Hint: It’s a contraction of “cannot”.
4. Most of those 800 million peasants smoke. Think about it.
5. The debt thing is really silly. The Chinese don’t hold much and our national debt is still about the same proportion to income that most Americans have in a average mortgage. Someone check my math, but I think it’s the Belgians that have a whopping 125% of debt to GDP ratio. The rest of Europe stinks compared to the U.S.
6. I note that monky and actus and the rest of the Hee-Haw gang really don’t offer an alternative. That is their M.O.
7. Things that have to happen for the PRC to be a world power: a) Do something about that truly amazing number above; b) Build a blue water navy–nope they are definitely not there yet–maybe in thirty years if they start right now; c) Find some allies besides Kook-boy in Pyongyang–this one is very hard while doing a and b, particularly when you make everyone nearby nervous anyway.
Shorter version: We’re still the stud. Way up the upper tail of the bell curve. That’s why the fucktards of the world don’t like us. And never will. Deal with it. Don’t whine about it.
Before someone (actus) nitpicks–the mortgage analogy is based on monthly payments.
Debt isn’t a problem if you can make the payments on it, wishbone.
$ 405,872,109,315.83 last year, and goin’ up.
http://www.publicdebt.treas.gov/opd/opdint.htm
China’s peasants are a challenge, but they are mostly farmers who support themselves. A little government cash goes a long way with people who grow their own food and own their own houses.
China has 800 million of them and its economy is still growing at 11% a year.
America’s economy is currently growing at a rate of 1.6% a year…
…and we’re scared to death that a couple million Mexican peasants will sink our economic lifeboat.
Until your corrupt “party” apparatus starts yanking the land away from said peasants (and the Communist Party in China is more like an organized crime family than a political movement). The Chinese have an enormous task in raising their capita GDP number. Their economy already suffers clear signs of overcapacity (especially in real estate markets in Beijing and Shanghai). I remeber when the Russian takeoff under Yeltsin went pop and this reminds me a great deal of that time. The undervaluation of the yuan plays a key role in the time bomb and they’ll find our about that one of these days (my bet is on the end of the decade when the U.S. budget gets more or less back in balance for a while and the dollar gets strong again–the tables will turn and that dollar denomiated debt will become a real problem for China).
You use quarterly growth for the U.S. number–I prefer annual stats and we’ll clip along at 3% or so this year even with oil at $60 a barrel (because the real not nominal price of oil is really not that expensive). As George Will recently pointed out, at that rate we add the GDP of Taiwan every year. Though the U.S. economy is interdependent with the world’s we won’t catch cold when China sneezes. The reverse is a certainty.
As for your immigration points–it’s more than 2 million Mexicans (and Salvadorans/Hondurans/Guatemalns, etc.). We all know they are not “taking jobs away” but they are taking social services without paying taxes–and that is the problem. Plus, to quote Dennis Miller: “I’m against illegal immigration for one reason–it’s fucking illegal.”
The value of the U.S. dollar is now set by the Central Bank of China.
They’ve got it just where they want it to maximize their growth and minimize ours…and there’s not a thing we can do about it.
If we are to compete with China, one thing we’ll need is a more…advanced…policy towards our neighbors to the south than borrowing even more money from China so we can build a big wall to keep them out.
That’s just all kinds of stupid right there.
This would be news to the international financial markets. Complex entities that do not fit well with economic ignorance. Since daily foreign exchange transactions can sometimes amount to more than the entire U.S. GDP–I don’t think the Chinese Central Bank has that kind of “hand” in Seinfeld teminology.
You mean free trade agreements? Got that–NAFTA and CAFTA. Anything more will require Brazil to get religion. Possible, but not probable.
If you mean just throwing the border open–that’s not advanced, that’s just silly.
Next!
Is it ok to post if you are drinking Chinese beer before posting? If I run out of Chinese beer can I susitute some Japanese beer?
Post no matter what beer you’re drinking. Beer is free from any perceived taint associated with its country of origin.
If America could do anything about the current high valuation of the dollar….why haven’t we done it already?
All we can muster is a few ignored pleas for China to raise the value of their currency vs. the dollar.
The Euro and the Canadian dollar already are trading in lockstep vs the dollar/RMB pair. Others will soon follow.
In the eyes of the world…China and America share a common currency now, and only the Central Bank of China can adjust the relative value of the dollar vs. their currency.
They also have a lot of control over our interest rates, the amount we pay on our debt, and our trade…
Monky–you’re just wrong.
First, the dollar has fallen recently against all currencies. Big budget deficits will do that.
Second, the yuan is undervalued. The Chinese are reluctant to deal with that issue because it will hurt their growth rate that is fueled with exports–more valuable yuan–more expensive exports.
Third, don’t bring Europeans to a real currency fight. The euro has so many problems that I could write a series of dissertations on it.
Fourth, you sound EXACTLY like every Japanophobe in the 1980s. Tying a $12 trillion economy to one other country in a globalized economy is oversimplification to the point of being absurd.
Oh, and cranky–I had some beer once from what was then Zaire (forget the brand name) at one of those places that would give you t-shirt if you sampled all 248 or so they had on hand (not all in one sitting, of course).
That one was tainted. And possessed. You’d think that Mobutu would have built one dcent brewery with all that stolen money…
Japan ain’t China, wishbone.
Japan is a tiny island nation with few natural resources.
China is as big as America, has abundant natural resources and four times our population.
People who think this is just another Japan Inc. bubble are kidding themselves.
And I noticed you dodged my question…
If we can do something about the high valuation of the dollar China has set…why haven’t we already done it?
It’s killin’ us.
It will continue to kill us.
Well, I haven’t read any of the other comments yet, but I’ll throw my two cents in anyway.
It isn’t so much as a monkifesto as it isn’t a plan for action. No, it is more of a fervant hope. m-bot is another in a long line who have eagerly predicted the end of the United States. The proposed successors that I have lived through were the Soviet Union, Germany, Japan, and now China (although if I recall correctly, a newsmagazine this year included South Korea on that list). All that the others have had in common is that the United States beat them. Based on past performance I will predict that the m-bot’s hopes will again be dashed, and that the United State will beat China like a gong.
I think this one truly is a telephone pole.
Maybe they just didn’t feel like answering the question. No rule says they had to.
Nobody really cares how right you think you are here, monky. We only humor your for… our own amusement. If someone does answer your question… good on them. But I sure ain’t.
And again, being related mostly to NATIONAL policy, I doubt that any of us is in the position to effect it directly.
But we could distract ourselves from the obvious erosion of our culture (something we can do something about) and the obvious threat of Islamic ideas (also something we can do something about.)
Your inability to see the difference demonstrates to me, the difference between a Leftover Regressive and an adult.
TW: only21? Sounds hot.
That policy works as well in debating someone, Mikey. Always toss out the small things first, and keep in reserve a big stick to whack your opponent with when he rejoins. And if you can keep in reserve an even bigger stick in case of a subsequent round, that’s a good idea, too.
As for cynn’s Sullivanesque argument that monky hit a nerve, he did, as I outlined in my previous post. It didn’t have anything to do with substantive issues, though. It had to do with the subhumanity that he advocates by what he mocks, and the fact that he’s constantly threadjacking by being such a loudly braying jackass. I’ve asked him, since he craves the limelight, to dazzle us with the brilliant insight that he clearly believes he possesses. And this is what we get? It’s poorer than the collective poverty of 800 million Chinese peasants.
monkey, for someone who seems so alarmed with our absolute level of debt, its stange that you think the strength of the dollar will kill us. i would think a weak or weakening dollar would be more of a concern. all those people holding us dollar assets being repaid in a weakening currency.
is it our debt or our strong dollar ( and by the way the dollar was much stronger in the 90’s)
I’ve always thought that people of this opinion had the easiest solution of all: Make them legal, and presto! no problem.
Some reading for monkyboy, actus, cynn…
More here and here .
monkey, can you please tell me how china “sets the high value of the dollar.” they have a fixed exchange rate which requires them to buy us dollar aseets to offset fx flows from their trade surplus. they peg their currency to the dollar and many would argue that the yuan is pegged too low relative to the dollar but this in no way implies that they set a high value for the dollar. are you suggesting that they intervene in the currency market and fix all dollar crosses.
I can never understand why all you hear about is the 21st Century will be the Chinese Century?
What about India?
Population
1 China 1,313,973,713
2 India 1,111,713,910
India with its problems is still more stable than China. Could it be it is the Worlds’s largest Democracy that makes the intelligentsia ignore it?
But China? Well Civil unrest is 74,000 demonstrations and riots in one year?
Economy? There is an area of the Chinese economy that is growing, , an industry that may make up
The Lusty Chinese Economy
actus–
Are you fishing for your own post? Do you suppose that there are reasons for immigration laws? If so, what would they be?
C’mon. Write up that Actifesto and I’ll be happy to post it.
Dang it, now I’m jonesing for Italian food.
Right. They’re buying our future production, in exchange for our buying their present production. That’s something to be proud of. Lets hope we remain the world’s reserve currency.
I think their peg is an intervention in the market.
Wow. Actus has something in common with the Bush administration. He’s still non-responsive, though.
They are exchanging their present production for US $.
Foreign-held US $ do not have to be exchanged for US exports, ever.
As I understand it, foreign-held $ are used as a trusted, low-inflation currency.
A Chinese exporter sells goods to US for $, if they want to exchange $ for goods? They sell for Yuan, or other currency, to someone preferring to hold US currency over Yuan. Sometime later the $ are sold again for Yuan or another currency, to another individual who uses US $ as their preferred store of value.
At some point, maybe some foreign held $ are exchanged for US exports.
Maybe at that point, more Chinese exports are traded for US $.
It’s a cycle.
Anyone got other ideas?
In re-reading my comment I think I may have implied that I saw WWII. I’m only forty – when I wrote the US beat Japan and Germany I wa thinking of all of the late 1970’s-early 1980’s predicitons that the German and Japanese economies would destroy the US.
I still predict based on past performance, common sense, and experience that the United States will beat China like a gong.
What monky doesn’t know about economics fills volumes. I thought we knew that.
Why waste a bullet when I can kill him with the thin edge of a book of matches?
actus – Paul Kennedy made many of the arguments that monky, and you, seem to be making. His schtick was that Japan was going to replace the debt-riddled US as king o’ the hill. A few years ago he admitted he was dead damned wrong…
Personally I’d lay odds on India doing much better than China. But it all depends on if you think rule of law, property rights, etc. have anything to do with prosperity. I suspect you do not give them much weight, if you think a quasi-totalitarian state will make some sort of Great Leap Forward.
When you quote figures like that you reveal both your dishonesty and your stupidity. It is dishonest because you surely know that our economic growth is averaging much more than 1.6% a year—and it is stupid because it is so easy to find the correct numbers.
If you were actually concerned about the level of our government debt you would be advocating a reduction in the ridiculous level of spending—which you occassionally do when you blame the debt on defense spending, an equally stupid claim that gets refuted everytime you make it.
The fact of the matter is that you are hoping for something, anything to happen that will bring America to her knees. Your statements are not warnings, they are wishful thinking.
Chinese takeout! Of course its a threat to our way of life–all that MSG makes your balls shrink to the point of being sterile and lowers your testosterone so you cannot fight back.
I do so enjoy these threads where the PW “gang” displays extraordinarily embarrassing ignorance, even for them. Clearly, Cynn’s earlier assessment of the raw state of your nerves was dead on. Must be the election. From “Dan“‘s full of crap (and he knows it) post to somebody linking Walter Williams (pathetic, really), it’s really been quite entertaining. I’ve especially enjoyed all of the table misreading and Cayman Islands stuff. Thank you.
A factless monkyspunk intones:
To which Lazar replies and quotes:
And monkyspunk, purple with rage, makes the sound of crickets.
Monkyspunk, those of who import Chinese goods, at least in my experience, haven’t seen costs change much in half a decede, if at all. How’s this offshore trade killin’ us?
Oh, and you got a problem enriching the Chinese? Raising their boat along with everybody else’s? Funny how racist the Left is when it politically behooves it.
Heeeeere’s david!
You’re obviously brilliant, too, david. Send me the davifesto.
I’d like for you to point out the bullshit and I know it parts for me, dave.
The raw part is assholes who think it’s proof of Israeli perfidy that they accidentally kill a woman whilst being shot at by snipers who use women and children as human shields. If they can’t commit atrocities on Israeli soil, they don’t mind manufacturing them on their own. monkyboy seems to find that amusing. If find the depth of his selfishness and ingratitude appalling.
OK
How’s that?
This more clear for you Davey?
In other words, actus, US $ have a value outside of their use in exchange for exports.
I don’t understand this competition with China attitude.
As 6Gun points out, trade is not a zero sum game.
They have enough on their plate that requires our cooperation.
Getting into a pissing contest with the world hyper-power would be insane from their position.
We have no interest in seeing a nuclear-armed state collapse.
I am cut, cut to the quick that you would accuse me of bad faith with respect to my representation of monkyboy, considering that he sets the bar so high for all of us!
. . . .
Bwahahahahaha! Geez, did I strike a nerve, or something?
“I do so enjoy these threads where the PW “gang†displays extraordinarily embarrassing ignorance, even for them.”
– Oh say it isn’t so. We’ve….we’ve….we’ve been “snobbishly, and priggishly, “elitistsized”… Ohhhh noooo…..
– If any one of you Lefturds have visited any foreign soil, you might have noticed, that in spite of all the wonderous, and erudite tomes predicting the end of the American economy, by this giant or that giant, without a single exception that I could site, and I’ve been in a great many of them so I know first hand, the people (undoubtedly unaware of brighter and sharper minds and world class writers that are revered for their monumental omnivorance) will kill to get American bucks every time, in lieu of their own beloved currency. I mean kill.
– Now class. whatever can we take from this? anyone? Bueller?
– Thats alright SecProggs. Keep looking for that hedgemony killer. It’s got to be out there somewhere. Your poli-sci profs swore to you it was. Fucking “group-think” twits.
Using $2.2 trillion as China’s GDP in 2005 and
$12.5 trillion for the U.S.
And
Using the average annual growth rate of 10% for China’s economy in the last five years and 2.5% for the U.S. :
If both countries sustained these rates, it
would still take twenty-six years before the size of China’s economy matched that of the U.S.
actus, i agree, they peg their currency to the dollar. my point was they do not intervene in the currency market and set the value of the dollar in all the other dollar crosses eg. usd/jpy ; eur/usd ; usd/chf …. which is what they woulld have to do if what monkey was saying was correct
Um, commenter person, I don’t think 26 is as many as you think it is (unless, of course, you’re figuring in the Rapture).
Yeah, he must be some kinda religious kook. Thanks for showing us how to keep it real, david.
David, when you’re wearing your sphincter as a necklace, lighting a match is just not a good idea.
You think those who believe the Rapture is imminent are “kooks”. I disagree. They are entitled to their beliefs, too. Who are you to call them names?
Gee, did I misrepresent you? I thought you were implying that Tai Chi Wawa must believe in the Rapture if he weren’t concerned about the time-frame. Or is that some kind of verbal tic you’ve got there? What did you mean by your joke, Mr. Kerry?
lazar, re. your post starting with “a chinese exporter sells goods to the u.s. for dollars…”
here are some other thoughts.
when a chinese exporter sells goods to the u.s. we pay for those goods in dollars. the exporter doesnt want dollars as his costs are in yuan. the exporter sells his dollars and buys yuan. now, because the yuan is fixed the central bank, on behalf of the gov’t, buys the dollars and sells yuan. this highlights several key implications :
if they did not fix their currency it would appretiate greatly, increasing the cost of their exports and forcing them to become more productive (ie. use less labour) or lose mkt share. the currency peg then is in place in large part to maximize employment and
the foreign reserves are a by product of a fixed exchange rate in place to support employment and an export sector – they are not necessarily the result of an investment maximization decision on the part of the gov’t. this is also true with other asian countries including japan. when people worry about what will happen if foreigners don’t want to hold us treasuries they miss the point that in alot of cases the individuals (corporations) have made the decision not to hold u.s. dollar assets and the large foreign reserves held at foreign central banks are a result of thier selling the u.s. dollars they earn through exporting and the central bank intervening in the mkt to keep the value of their currency from appretiating.
What joke?