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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#41
Posted to rec.crafts.metalworking
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Manufacturing will move
"Michael A. Terrell" wrote in message ... Buerste wrote: "Michael A. Terrell" wrote in message ... snip Great post John! If I were 20 years old again, I'm sure I could do more, make better decisions and live up to your expectations. Or just tell him to **** off. Mike, you know me better than that! Yes, but you have thought it, more than once. ;-) -- You can't have a sense of humor, if you have no sense! I've shaken my head and rolled my eyes more than once too! It's the "Blink, blink, blink" that still astonishes me. |
#42
Posted to rec.crafts.metalworking
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Manufacturing will move
"Ed Huntress" wrote in message ... "Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Mark Rand" wrote in message ... On Thu, 16 Jul 2009 14:50:52 -0400, "Ed Huntress" wrote: "Richard the Dreaded Libertarian" wrote in message news On Wed, 15 Jul 2009 18:08:54 -0400, Ed Huntress wrote: "Richard the Dreaded Libertarian" wrote in message news On Wed, 15 Jul 2009 00:51:47 -0400, Ed Huntress wrote: further automation, you will have one economic effect: You'll drive real wages, and the real economy, into a race for the bottom. It would seem that obamanomics already has us sliding down that particular razor blade. And where was it headed before the stimulus, Rich? Have you studied the patterns in recessions sufficiently to evaluate this one, in comparison? Well, obviously, the Cheney/Bush "bailout" got us started. I suspect they just wanted to dump the worst possible mess they could create right onto Barry's lap. I got sickened by Obama's little speech: "Hey, I inherited this huge deficit!" (wah, wah). So what's the first thing he does? TRIPLES IT! I fear it's reached the point where the best that we Freedom-lovers are going to be able to do is to hunker down, protect our jewels, and hope we enjoy the ride when the whole card house collapses around us. Thanks, Rich The irony of this downturn is that all those years of deficit spending (with no good reason) has left no choice but more deficit spending -- unless you want to do another Herbert Hoover and have the government sit there with its collective thumb up its butt, watching the economy go down in flames. In other words, now there *is* a good reason for it. And it's 'way more painful than it should have been, because we're digging in a place where there already was a big hole. Seriously, there is no alternative, except in the academic theories of some of the free-market extremists. And they don't have a single example from history to draw upon, to support their ideas. It's better than that Ed (for irony, anyway). Without the continuing support of China and, to a slightly lesser extent, Japan. The US would probably be having to go to the IMF for a bailout, with all of the pain that goes with that. People, mostly in other fora, may get very exercised about the Chinese, but they are the ones that are loaning the money for all that deficit spending. For the record, as of the first of this year, China held 7.4% of the public debt of the US. Japan held 6.3%. Those are large amounts, but let's not get carried away. -- Ed Huntress Wouldn't the US be better off concentrating on wealth creation rather than redistribution? Is it purely a political decision to abandon wealth creation? Hmmm. Have you stopped beating your wife yet? g What do you mean by that question, Tom? And who is the "US" that has to do this concentrating? -- Ed Huntress Purely philosophical, but...real wealth is created by agriculture (grow it), mining (dig it up or pump it), manufacturing (put it together and add value) and maybe intellectual property (units of unique valuable labor). It seems the US is writing IOUs for future wealth creation or existing land. With a trade deficit, the US is creating less wealth than it's buying with IOUs. Is this a sustainable situation or should we be growing, mining and making as much as we can and selling it for the other guy's IOUs? Eventually, it seems, people outside the US will own every acre of land, decades of future labor and everything the US can grow and mine. As much as we try to devalue the unit s of IOUs so when they have to get paid back, they will be worth less, there is still a big loss. I know a thousands books could be and have been written but I think in simple terms of payables/receivables. We should export (build receivables) as hard as we can and reduce imports with equal vigor. But is the rest of the world willing to pay more for the same unit of labor (value added), all else being equal on manufactured goods? |
#43
Posted to rec.crafts.metalworking
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Manufacturing will move
"Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Mark Rand" wrote in message ... On Thu, 16 Jul 2009 14:50:52 -0400, "Ed Huntress" wrote: "Richard the Dreaded Libertarian" wrote in message newsan.2009.07.16.19.38.37.148549@example. net... On Wed, 15 Jul 2009 18:08:54 -0400, Ed Huntress wrote: "Richard the Dreaded Libertarian" wrote in message news On Wed, 15 Jul 2009 00:51:47 -0400, Ed Huntress wrote: further automation, you will have one economic effect: You'll drive real wages, and the real economy, into a race for the bottom. It would seem that obamanomics already has us sliding down that particular razor blade. And where was it headed before the stimulus, Rich? Have you studied the patterns in recessions sufficiently to evaluate this one, in comparison? Well, obviously, the Cheney/Bush "bailout" got us started. I suspect they just wanted to dump the worst possible mess they could create right onto Barry's lap. I got sickened by Obama's little speech: "Hey, I inherited this huge deficit!" (wah, wah). So what's the first thing he does? TRIPLES IT! I fear it's reached the point where the best that we Freedom-lovers are going to be able to do is to hunker down, protect our jewels, and hope we enjoy the ride when the whole card house collapses around us. Thanks, Rich The irony of this downturn is that all those years of deficit spending (with no good reason) has left no choice but more deficit spending -- unless you want to do another Herbert Hoover and have the government sit there with its collective thumb up its butt, watching the economy go down in flames. In other words, now there *is* a good reason for it. And it's 'way more painful than it should have been, because we're digging in a place where there already was a big hole. Seriously, there is no alternative, except in the academic theories of some of the free-market extremists. And they don't have a single example from history to draw upon, to support their ideas. It's better than that Ed (for irony, anyway). Without the continuing support of China and, to a slightly lesser extent, Japan. The US would probably be having to go to the IMF for a bailout, with all of the pain that goes with that. People, mostly in other fora, may get very exercised about the Chinese, but they are the ones that are loaning the money for all that deficit spending. For the record, as of the first of this year, China held 7.4% of the public debt of the US. Japan held 6.3%. Those are large amounts, but let's not get carried away. -- Ed Huntress Wouldn't the US be better off concentrating on wealth creation rather than redistribution? Is it purely a political decision to abandon wealth creation? Hmmm. Have you stopped beating your wife yet? g What do you mean by that question, Tom? And who is the "US" that has to do this concentrating? -- Ed Huntress Purely philosophical, but...real wealth is created by agriculture (grow it), mining (dig it up or pump it), manufacturing (put it together and add value) and maybe intellectual property (units of unique valuable labor). Debatable and complex; we can discuss it sometime later, maybe. For now, consider that one way to look at most goods is that they're nothing more than packaged services. Grow a tomato, then eat it, and it's gone. But the tomato in the process of being consumed can be thought of as "wealth." Someone will pay you for it but its value has meaning only as it's being consumed. The same thing applies to a pair of pants, to a drill bit, or to having your teeth cleaned or your taxes prepared. The big difference between goods and services is that, on the average, most goods deliver a service for a longer time, so they provide a good return of "wealth" on their investment. Not always (think of the tomato), but often. It seems the US is writing IOUs for future wealth creation or existing land. With a trade deficit, the US is creating less wealth than it's buying with IOUs. Ok, we can let that one lie like that for now. Is this a sustainable situation or should we be growing, mining and making as much as we can and selling it for the other guy's IOUs? A good question, but the fact is that we're better off doing a lot of trade, and it really doesn't matter much where the balance lies. I know that's a hard pill to swallow, and I'm not good at explaining it, but that appears to be the way it is. The countries that *need* a net positive trade balance to advance their economies are developing countries. They need foreign exchange to invest in foreign-made capital equipment. For fully developed countries, the advantages of low-cost imported goods from the developing countries, plus the total economic activity that results from both buying and selling foreign goods even in a deficit situation, outweighs any loss to total national income that results from the trade deficit. Where it *does* matter is at the micro level: individual companies, and types of workers, who are squeezed out by low-cost foreign competition. Eventually, it seems, people outside the US will own every acre of land, decades of future labor and everything the US can grow and mine. No, it's self-limiting. But the current situation is that China and other East Asian countries are doing their best to suspend the day of reckoning, partly by discouraging domestic consumption; partly by jimmying their currency to low levels; partly by buying up currency and securities from their "customer" countries; and partly by a bunch of other things. But it's like putting their finger in a dike. Eventually, they won't be able to hold it back. Their currency will evaluate; their citizens will put unrelenting pressure on to consume more; and the foreign currencies they hold will become a huge drag on their growth. As much as we try to devalue the unit s of IOUs so when they have to get paid back, they will be worth less, there is still a big loss. They may never be paid back. It is in no one's interest to pay them off. You may remember that the Japanese tried to spend some of their piles of cash on expensive US real estate. All they accomplished was to create a bubble and a collapse in expensive (mostly commercial) real estate, which resulted in them losing almost all of the money they had invested. This happened a few decades ago. I know a thousands books could be and have been written but I think in simple terms of payables/receivables. We should export (build receivables) as hard as we can and reduce imports with equal vigor. But is the rest of the world willing to pay more for the same unit of labor (value added), all else being equal on manufactured goods? This is one of those cases where countries are not like businesses or households. Adam Smith pointed this out over 200 years ago. He used the example of cooking pots (tongue-in-cheek). If a country stocks up on foreign currency or securities (cooking pots), all it has is a big pile of pots. In the case of securities, cashing them in, at the level of large transfers from central banks, destroys their value. Thus, they aren't really very liquid at all when you have big piles of them. The Chinese knew this going in. They were following the pattern used by Japan a couple of decades earlier. They don't care about owning anything. They care about enabling their mercantile economies, by greasing the way for the consuming countries to buy their junk. Once they've used as much of their earnings as they practically can for business and infrastructure investment, the rest of it is fairly useless to them. I know, this is another hard pill to swallow. But that's the way it is. As you say, there are many books written about this. There's no point in trying to summarize them here, because no one will believe it, and it will just start endless superficial and sophomoric arguments. -- Ed Huntress |
#44
Posted to rec.crafts.metalworking
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Manufacturing will move
On Thu, 16 Jul 2009 14:50:52 -0400, Ed Huntress wrote:
"Richard the Dreaded Libertarian" wrote in message I fear it's reached the point where the best that we Freedom-lovers are going to be able to do is to hunker down, protect our jewels, and hope we enjoy the ride when the whole card house collapses around us. The irony of this downturn is that all those years of deficit spending (with no good reason) has left no choice but more deficit spending -- unless you want to do another Herbert Hoover and have the government sit there with its collective thumb up its butt, watching the economy go down in flames. Um, I believe you've gotten this ass-backwards. The Govermnent is now trying to do EVERYTHING, and the economy IS going down in flames. I WISH the government would sit on its collective butt and do as little as humanly possible - then, the Free Market woluld pull us out of this mess in a matter of months. But, I guess we're going to have to learn the hard way once again. Thanks, Rich |
#45
Posted to rec.crafts.metalworking
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Manufacturing will move
"Richard the Dreaded Libertarian" wrote in message news On Thu, 16 Jul 2009 14:50:52 -0400, Ed Huntress wrote: "Richard the Dreaded Libertarian" wrote in message I fear it's reached the point where the best that we Freedom-lovers are going to be able to do is to hunker down, protect our jewels, and hope we enjoy the ride when the whole card house collapses around us. The irony of this downturn is that all those years of deficit spending (with no good reason) has left no choice but more deficit spending -- unless you want to do another Herbert Hoover and have the government sit there with its collective thumb up its butt, watching the economy go down in flames. Um, I believe you've gotten this ass-backwards. The Govermnent is now trying to do EVERYTHING, and the economy IS going down in flames. No, the economy was on track to go down around six or eight months ago. There is hardly an economist in the western world who doesn't know this. There isn't one economist worth spit who didn't say, around the first of the year, that unemployment wouldn't peak until sometime early in 2010. That's the legacy we've been handed. It's been a very sharp downturn, for a variety of reasons. I WISH the government would sit on its collective butt and do as little as humanly possible - then, the Free Market woluld pull us out of this mess in a matter of months. That's nothing but a bunch of ideological bull that's been running around, mostly since the '70s, and there isn't a single example to support it. And if you want to go back to Hoover's days, or before that, the "free market" some people thought existed then was based on tariffs running as high as 40%, a great big gift bag of export subsidies, and several other things that made the market about as *un* free as it could be. And that was BEFORE the Smoot-Hawley Tariff Act (1930). But, I guess we're going to have to learn the hard way once again. We always do. Hoover and Treasury Sec. Mellon pursued a free-market approach; they dug us into a deep, deep depression. FDR started to turn it around but then lost his political clout and cut back on stimulus programs in 1936; the result was another whipsaw back into depression. Free markets can't pull you out of a recession, Rich. If you try, the whole economy just stalls out. The worst case is what happened under Hoover. With nobody buying anything, nobody was investing. So the economy just spiralled down. We saw a smaller version with Japan over the past decade. They got into a deflationary spin and a liquidity trap, and nothing budged. Japan's economy just went into the doldrums. If we don't stimulate ours sufficiently, we're likely to run into the same trap. Again, this is what experience tells us. There IS NO experience to prove that "free markets" can get you out of a deep recession. -- Ed Huntress |
#46
Posted to rec.crafts.metalworking
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Manufacturing will move
"Ed Huntress" wrote in message ... "Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Mark Rand" wrote in message ... On Thu, 16 Jul 2009 14:50:52 -0400, "Ed Huntress" wrote: "Richard the Dreaded Libertarian" wrote in message newsan.2009.07.16.19.38.37.148549@example .net... On Wed, 15 Jul 2009 18:08:54 -0400, Ed Huntress wrote: "Richard the Dreaded Libertarian" wrote in message news On Wed, 15 Jul 2009 00:51:47 -0400, Ed Huntress wrote: further automation, you will have one economic effect: You'll drive real wages, and the real economy, into a race for the bottom. It would seem that obamanomics already has us sliding down that particular razor blade. And where was it headed before the stimulus, Rich? Have you studied the patterns in recessions sufficiently to evaluate this one, in comparison? Well, obviously, the Cheney/Bush "bailout" got us started. I suspect they just wanted to dump the worst possible mess they could create right onto Barry's lap. I got sickened by Obama's little speech: "Hey, I inherited this huge deficit!" (wah, wah). So what's the first thing he does? TRIPLES IT! I fear it's reached the point where the best that we Freedom-lovers are going to be able to do is to hunker down, protect our jewels, and hope we enjoy the ride when the whole card house collapses around us. Thanks, Rich The irony of this downturn is that all those years of deficit spending (with no good reason) has left no choice but more deficit spending -- unless you want to do another Herbert Hoover and have the government sit there with its collective thumb up its butt, watching the economy go down in flames. In other words, now there *is* a good reason for it. And it's 'way more painful than it should have been, because we're digging in a place where there already was a big hole. Seriously, there is no alternative, except in the academic theories of some of the free-market extremists. And they don't have a single example from history to draw upon, to support their ideas. It's better than that Ed (for irony, anyway). Without the continuing support of China and, to a slightly lesser extent, Japan. The US would probably be having to go to the IMF for a bailout, with all of the pain that goes with that. People, mostly in other fora, may get very exercised about the Chinese, but they are the ones that are loaning the money for all that deficit spending. For the record, as of the first of this year, China held 7.4% of the public debt of the US. Japan held 6.3%. Those are large amounts, but let's not get carried away. -- Ed Huntress Wouldn't the US be better off concentrating on wealth creation rather than redistribution? Is it purely a political decision to abandon wealth creation? Hmmm. Have you stopped beating your wife yet? g What do you mean by that question, Tom? And who is the "US" that has to do this concentrating? -- Ed Huntress Purely philosophical, but...real wealth is created by agriculture (grow it), mining (dig it up or pump it), manufacturing (put it together and add value) and maybe intellectual property (units of unique valuable labor). Debatable and complex; we can discuss it sometime later, maybe. For now, consider that one way to look at most goods is that they're nothing more than packaged services. Grow a tomato, then eat it, and it's gone. But the tomato in the process of being consumed can be thought of as "wealth." Someone will pay you for it but its value has meaning only as it's being consumed. The same thing applies to a pair of pants, to a drill bit, or to having your teeth cleaned or your taxes prepared. The big difference between goods and services is that, on the average, most goods deliver a service for a longer time, so they provide a good return of "wealth" on their investment. Not always (think of the tomato), but often. It seems the US is writing IOUs for future wealth creation or existing land. With a trade deficit, the US is creating less wealth than it's buying with IOUs. Ok, we can let that one lie like that for now. Is this a sustainable situation or should we be growing, mining and making as much as we can and selling it for the other guy's IOUs? A good question, but the fact is that we're better off doing a lot of trade, and it really doesn't matter much where the balance lies. I know that's a hard pill to swallow, and I'm not good at explaining it, but that appears to be the way it is. The countries that *need* a net positive trade balance to advance their economies are developing countries. They need foreign exchange to invest in foreign-made capital equipment. For fully developed countries, the advantages of low-cost imported goods from the developing countries, plus the total economic activity that results from both buying and selling foreign goods even in a deficit situation, outweighs any loss to total national income that results from the trade deficit. Where it *does* matter is at the micro level: individual companies, and types of workers, who are squeezed out by low-cost foreign competition. Eventually, it seems, people outside the US will own every acre of land, decades of future labor and everything the US can grow and mine. No, it's self-limiting. But the current situation is that China and other East Asian countries are doing their best to suspend the day of reckoning, partly by discouraging domestic consumption; partly by jimmying their currency to low levels; partly by buying up currency and securities from their "customer" countries; and partly by a bunch of other things. But it's like putting their finger in a dike. Eventually, they won't be able to hold it back. Their currency will evaluate; their citizens will put unrelenting pressure on to consume more; and the foreign currencies they hold will become a huge drag on their growth. As much as we try to devalue the unit s of IOUs so when they have to get paid back, they will be worth less, there is still a big loss. They may never be paid back. It is in no one's interest to pay them off. You may remember that the Japanese tried to spend some of their piles of cash on expensive US real estate. All they accomplished was to create a bubble and a collapse in expensive (mostly commercial) real estate, which resulted in them losing almost all of the money they had invested. This happened a few decades ago. I know a thousands books could be and have been written but I think in simple terms of payables/receivables. We should export (build receivables) as hard as we can and reduce imports with equal vigor. But is the rest of the world willing to pay more for the same unit of labor (value added), all else being equal on manufactured goods? This is one of those cases where countries are not like businesses or households. Adam Smith pointed this out over 200 years ago. He used the example of cooking pots (tongue-in-cheek). If a country stocks up on foreign currency or securities (cooking pots), all it has is a big pile of pots. In the case of securities, cashing them in, at the level of large transfers from central banks, destroys their value. Thus, they aren't really very liquid at all when you have big piles of them. The Chinese knew this going in. They were following the pattern used by Japan a couple of decades earlier. They don't care about owning anything. They care about enabling their mercantile economies, by greasing the way for the consuming countries to buy their junk. Once they've used as much of their earnings as they practically can for business and infrastructure investment, the rest of it is fairly useless to them. I know, this is another hard pill to swallow. But that's the way it is. As you say, there are many books written about this. There's no point in trying to summarize them here, because no one will believe it, and it will just start endless superficial and sophomoric arguments. -- Ed Huntress I knew it was overly simplistic and hard to grasp. I remember an interview on TV with an expert that was explaining some of the points of economics and the interviewer was concerned about foreigners buying land in the US. The expert said something along the lines of "Don't worry, they can't take it with them.". On the other hand I've read spattering about "Fiat Money". Of course, there are always people that will certainly figure out how to game ANY system. |
#47
Posted to rec.crafts.metalworking
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Manufacturing will move
"Buerste" wrote in message news "Ed Huntress" wrote in message ... "Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Buerste" wrote in message ... "Ed Huntress" wrote in message ... "Mark Rand" wrote in message ... On Thu, 16 Jul 2009 14:50:52 -0400, "Ed Huntress" wrote: "Richard the Dreaded Libertarian" wrote in message newsan.2009.07.16.19.38.37.148549@exampl e.net... On Wed, 15 Jul 2009 18:08:54 -0400, Ed Huntress wrote: "Richard the Dreaded Libertarian" wrote in message news On Wed, 15 Jul 2009 00:51:47 -0400, Ed Huntress wrote: further automation, you will have one economic effect: You'll drive real wages, and the real economy, into a race for the bottom. It would seem that obamanomics already has us sliding down that particular razor blade. And where was it headed before the stimulus, Rich? Have you studied the patterns in recessions sufficiently to evaluate this one, in comparison? Well, obviously, the Cheney/Bush "bailout" got us started. I suspect they just wanted to dump the worst possible mess they could create right onto Barry's lap. I got sickened by Obama's little speech: "Hey, I inherited this huge deficit!" (wah, wah). So what's the first thing he does? TRIPLES IT! I fear it's reached the point where the best that we Freedom-lovers are going to be able to do is to hunker down, protect our jewels, and hope we enjoy the ride when the whole card house collapses around us. Thanks, Rich The irony of this downturn is that all those years of deficit spending (with no good reason) has left no choice but more deficit spending -- unless you want to do another Herbert Hoover and have the government sit there with its collective thumb up its butt, watching the economy go down in flames. In other words, now there *is* a good reason for it. And it's 'way more painful than it should have been, because we're digging in a place where there already was a big hole. Seriously, there is no alternative, except in the academic theories of some of the free-market extremists. And they don't have a single example from history to draw upon, to support their ideas. It's better than that Ed (for irony, anyway). Without the continuing support of China and, to a slightly lesser extent, Japan. The US would probably be having to go to the IMF for a bailout, with all of the pain that goes with that. People, mostly in other fora, may get very exercised about the Chinese, but they are the ones that are loaning the money for all that deficit spending. For the record, as of the first of this year, China held 7.4% of the public debt of the US. Japan held 6.3%. Those are large amounts, but let's not get carried away. -- Ed Huntress Wouldn't the US be better off concentrating on wealth creation rather than redistribution? Is it purely a political decision to abandon wealth creation? Hmmm. Have you stopped beating your wife yet? g What do you mean by that question, Tom? And who is the "US" that has to do this concentrating? -- Ed Huntress Purely philosophical, but...real wealth is created by agriculture (grow it), mining (dig it up or pump it), manufacturing (put it together and add value) and maybe intellectual property (units of unique valuable labor). Debatable and complex; we can discuss it sometime later, maybe. For now, consider that one way to look at most goods is that they're nothing more than packaged services. Grow a tomato, then eat it, and it's gone. But the tomato in the process of being consumed can be thought of as "wealth." Someone will pay you for it but its value has meaning only as it's being consumed. The same thing applies to a pair of pants, to a drill bit, or to having your teeth cleaned or your taxes prepared. The big difference between goods and services is that, on the average, most goods deliver a service for a longer time, so they provide a good return of "wealth" on their investment. Not always (think of the tomato), but often. It seems the US is writing IOUs for future wealth creation or existing land. With a trade deficit, the US is creating less wealth than it's buying with IOUs. Ok, we can let that one lie like that for now. Is this a sustainable situation or should we be growing, mining and making as much as we can and selling it for the other guy's IOUs? A good question, but the fact is that we're better off doing a lot of trade, and it really doesn't matter much where the balance lies. I know that's a hard pill to swallow, and I'm not good at explaining it, but that appears to be the way it is. The countries that *need* a net positive trade balance to advance their economies are developing countries. They need foreign exchange to invest in foreign-made capital equipment. For fully developed countries, the advantages of low-cost imported goods from the developing countries, plus the total economic activity that results from both buying and selling foreign goods even in a deficit situation, outweighs any loss to total national income that results from the trade deficit. Where it *does* matter is at the micro level: individual companies, and types of workers, who are squeezed out by low-cost foreign competition. Eventually, it seems, people outside the US will own every acre of land, decades of future labor and everything the US can grow and mine. No, it's self-limiting. But the current situation is that China and other East Asian countries are doing their best to suspend the day of reckoning, partly by discouraging domestic consumption; partly by jimmying their currency to low levels; partly by buying up currency and securities from their "customer" countries; and partly by a bunch of other things. But it's like putting their finger in a dike. Eventually, they won't be able to hold it back. Their currency will evaluate; their citizens will put unrelenting pressure on to consume more; and the foreign currencies they hold will become a huge drag on their growth. As much as we try to devalue the unit s of IOUs so when they have to get paid back, they will be worth less, there is still a big loss. They may never be paid back. It is in no one's interest to pay them off. You may remember that the Japanese tried to spend some of their piles of cash on expensive US real estate. All they accomplished was to create a bubble and a collapse in expensive (mostly commercial) real estate, which resulted in them losing almost all of the money they had invested. This happened a few decades ago. I know a thousands books could be and have been written but I think in simple terms of payables/receivables. We should export (build receivables) as hard as we can and reduce imports with equal vigor. But is the rest of the world willing to pay more for the same unit of labor (value added), all else being equal on manufactured goods? This is one of those cases where countries are not like businesses or households. Adam Smith pointed this out over 200 years ago. He used the example of cooking pots (tongue-in-cheek). If a country stocks up on foreign currency or securities (cooking pots), all it has is a big pile of pots. In the case of securities, cashing them in, at the level of large transfers from central banks, destroys their value. Thus, they aren't really very liquid at all when you have big piles of them. The Chinese knew this going in. They were following the pattern used by Japan a couple of decades earlier. They don't care about owning anything. They care about enabling their mercantile economies, by greasing the way for the consuming countries to buy their junk. Once they've used as much of their earnings as they practically can for business and infrastructure investment, the rest of it is fairly useless to them. I know, this is another hard pill to swallow. But that's the way it is. As you say, there are many books written about this. There's no point in trying to summarize them here, because no one will believe it, and it will just start endless superficial and sophomoric arguments. -- Ed Huntress I knew it was overly simplistic and hard to grasp. I remember an interview on TV with an expert that was explaining some of the points of economics and the interviewer was concerned about foreigners buying land in the US. The expert said something along the lines of "Don't worry, they can't take it with them.". On the other hand I've read spattering about "Fiat Money". Of course, there are always people that will certainly figure out how to game ANY system. Right. Well, macroeconomics is something that most of us think should be capable of being analyzed and figured out in fine detail, because we have tons of data and quite a bit of historical experience. But it's anything *but* clear-cut. It's full of theories that are untested or untestable, and complicating variables, and everything you can think of that makes it frustrating and uncertain. Land ownership by foreigners is pretty simple; it's subject to our politics and laws, for the most part, so that expert has a good point. Fiat money is much more difficult. When you start applying the things we know about household or business finance to a sovereign country, a lot of what we think of as solid and obvious, turns to abstract mush. That includes "money" itself. Two core facts that are pretty solid are that it is essential to have growth and it is essential to have trust -- in at least one reserve currency. Without those two things, capitalism as we know it won't work. But beyond that, almost anything you say about it can start an argument. g -- Ed Huntress |
#48
Posted to rec.crafts.metalworking
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Manufacturing will move
Buerste wrote: I've shaken my head and rolled my eyes more than once too! It's the "Blink, blink, blink" that still astonishes me. Then stop at two blinks. -- You can't have a sense of humor, if you have no sense! |
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