|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
Kuros
Joined: 27 Apr 2004
|
 Posted: Sun Aug 12, 2007 7:33 am Post subject: |
 |
|
| keane wrote: |
Has BJWD considered the impact of China calling in their debt holdings, recently threatened for the first time? Has BJWD considered the credit crunch is expanding? Or that energy prices are causing problems world wide? Or the shortfall in oil production (about 1.3 billion barrels) in relation to demand? Or that oil production has been below its peak for two years now? Or the rises in food costs, transportation costs, etc., which are likely permanent?
While BJWDs basic analysis may be fairly accurate, it does seem simplistic. Or was BJWD speaking only to the narrow issue of the Fed's behavior and leaving the complexities for another day? |
BJWD's analysis is not simplistic, its just kind of a summary. He managed to mention pretty much all the important factors, and like he said, the problem is some amalgamation of excess liquidity, Asian monetary policy, and US mortgage securitization.
The one thing you mentioned up there which I think is not a concern whatsoever is the impact China has on our debt holdings. Aside from the fact that supply-sidism has become a tenet of GOP faith and that America simply borrows too much, China's impact of holding Treasury Bills is not so great.
They say if you owe some money, the banker owns you, but if you owe a lot of money, you own the banker. That is what applies here. China cannot sell off all its debt holdings without posting a huge loss. Remember, China's currency has been soaring against a declining dollar, partly because China's currency does not float freely and instead is confined to a small daily band. China is the big loser in this relationship. I heard as of 2006, China had invested over $130 billion in US Mortgage-Based Securities (MBS) because they offered a better rate of return than T-bills. Well, with the subprime lending bust, who is the big loser? |
|
| Back to top |
|
 |
thepeel
Joined: 08 Aug 2004
|
| Posted: Sun Aug 12, 2007 7:43 am Post subject: |
|
|
China won't have a big sell off as they would not benefit. If they sell a large portion of their reserves, the remaining portion is worth less. In addition, China is still a dead poor country. Should they decline the dollar, assuming it is possible for them to sell all at once and avoid the negative consequences to their remaining reserves, a dead dollar would mean the end of China's amazing exports to America.
The system will stay as it is. No need to panic. China and the USA need eachother. |
|
| Back to top |
|
|
keane
Joined: 09 Jul 2007
|
| Posted: Sun Aug 12, 2007 7:46 am Post subject: |
|
|
| Kuros wrote: |
| keane wrote: |
Has BJWD considered the impact of China calling in their debt holdings, recently threatened for the first time? Has BJWD considered the credit crunch is expanding? Or that energy prices are causing problems world wide? Or the shortfall in oil production (about 1.3 billion barrels) in relation to demand? Or that oil production has been below its peak for two years now? Or the rises in food costs, transportation costs, etc., which are likely permanent?
While BJWDs basic analysis may be fairly accurate, it does seem simplistic. Or was BJWD speaking only to the narrow issue of the Fed's behavior and leaving the complexities for another day? |
BJWD's analysis is not simplistic, its just kind of a summary. He managed to mention pretty much all the important factors, |
You missed the point. I am not talking politics. And this is the key phrase, the last of his post:
"It is not an ideal system, but ultimately a stable one. IMO."
As I said, as far as considering the purely monetary points on the issue, I don't quibble much with what he said. I am quibbling with the statement that the system is stable. There is no such thing as a social system that is ultimately stable. In the short-term, yes. But none is forever stable. Given the grave challenges now confronting us, is it wise to discuss a possible major economic bubble in terms only of the bubble with no reference to other factors that might limit the ability of governments, institutions and persons to respond? Also, I asked if he/she was intentionally limiting his scope.
Perhaps you should leave BJWD to answer for him-/herself. You've not clarified anything here. |
|
| Back to top |
|
|
thepeel
Joined: 08 Aug 2004
|
| Posted: Sun Aug 12, 2007 8:11 am Post subject: |
|
|
I don't know. Who can say what will and will not work many decades down the line. But for right now, here and now, the monetary system used by the USA and the developed world will function just fine. In fact, I'd go as far as to say that the stable monetary policy of recent past has done more for economic growth than much else.
Competing private currencies would likely be more stable, in my opinion. |
|
| Back to top |
|
|
dogshed
Joined: 28 Apr 2006
|
| Posted: Sun Aug 12, 2007 8:15 am Post subject: |
|
|
| BJWD: This conversation is over my head, but could you explain why you think manufacturing will return to the US? |
|
| Back to top |
|
|
Kuros
Joined: 27 Apr 2004
|
| Posted: Sun Aug 12, 2007 8:24 am Post subject: |
|
|
| keane wrote: |
| Perhaps you should leave BJWD to answer for him-/herself. You've not clarified anything here. |
 |
|
| Back to top |
|
|
thepeel
Joined: 08 Aug 2004
|
| Posted: Sun Aug 12, 2007 8:40 am Post subject: |
|
|
| dogshed wrote: |
| BJWD: This conversation is over my head, but could you explain why you think manufacturing will return to the US? |
A weaker dollar means that it is cheaper for foreigners to buy products made in the USA. It is the same principle that makes the US a more affordable tourist destination for Europeans now that the $ is worth relatively less than the Euro.
The opposite of this is that it is now more expensive for Americans to buy goods made in foreign lands. So, 40inch flat tv's for 800$ is prolly a thing of the past. |
|
| Back to top |
|
|
keane
Joined: 09 Jul 2007
|
| Posted: Mon Aug 13, 2007 12:36 am Post subject: |
|
|
| BJWD wrote: |
I don't know. Who can say what will and will not work many decades down the line. But for right now, here and now, the monetary system used by the USA and the developed world will function just fine. In fact, I'd go as far as to say that the stable monetary policy of recent past has done more for economic growth than much else.
Competing private currencies would likely be more stable, in my opinion. |
Fair enough. Thanks for the clarification.
You might want to consider the role of oil in that economic growth. The curves for oil production and population are in perfect sync. It should be said that economists have a track record on predicting oil that is abysmal. Geophysicists and such do a far better job. To extend, the theories of economics do not create a curve for growth that matches what has actually happened. That is, unless you factor in for oil energy.
Just a thought.
How are your assumptions affected by the peak of oil production?
Hint: shortages are already occurring in the Third World.
If you are sincere as an analyst, you will want to consider all factors. Do some reading and get back to me. |
|
| Back to top |
|
|
thepeel
Joined: 08 Aug 2004
|
| Posted: Mon Aug 13, 2007 12:41 am Post subject: |
|
|
Traders and governments influence prices very much. Far too much. As we saw in the IT and then housing bubble, traders and finance types are just as vulnerable to 'runs' as everybody else. We are a species that loves a herd.
There will be no meaningful, sustained shortages as long as governments do not try and keep the price of oil artificially low. As the price increases, we will move away from oil as a source of energy. |
|
| Back to top |
|
|
keane
Joined: 09 Jul 2007
|
| Posted: Mon Aug 13, 2007 12:51 am Post subject: |
|
|
| But what does the lack of oil, in the short-term, do to stability? The general sense with those that are aware of the issue is that there is not time to ramp up other forms of energy in time to avoid serious disruption. The argument is almost all about the depth and the when of the trouble, not the if. |
|
| Back to top |
|
|
thepeel
Joined: 08 Aug 2004
|
| Posted: Mon Aug 13, 2007 1:06 am Post subject: |
|
|
| I trust the market. If there was anything near a consensus that oil is "running out" amongst producers, traders, investment banks and the whole financial architecture, prices would be far and away higher than 100$/barrel. |
|
| Back to top |
|
|
keane
Joined: 09 Jul 2007
|
| Posted: Mon Aug 13, 2007 2:05 am Post subject: |
|
|
| BJWD wrote: |
| I trust the market. If there was anything near a consensus that oil is "running out" amongst producers, traders, investment banks and the whole financial architecture, prices would be far and away higher than 100$/barrel. |
Concensus is closer than you think. I suggest you read the latest from the IEA. Six months ago they were saying all was rosy. In just six months they moved from there to saying there is serious problems in supply over and/or within 5 years. |
|
| Back to top |
|
|
Gatsby
Joined: 09 Feb 2007
|
| Posted: Mon Aug 13, 2007 2:10 am Post subject: |
|
|
Melt down? What meltdown?
A 10 percent drop from a high flying stockmarket is called a "correction." Corrections are often considered healthy, a breather before another escalator ride. This market sure could use a correction. We haven't seen it yet.
The real issue is the impact of current conditions on the general economy and jobs. Will there be a recession? That takes two quarters, by definition; it doesn't happen overnight.
The general economic situation in the U.S. is such a mess that it's a miracle it keeps staggering along, albeit like a punch drunk prize fighter who refuses to fall down.
Perhaps this is because most people are clueless how bad things really are. You keep taking a little teeny bit away at a time, slowly, over and over and over again, and people don't know what's hit them. But if suddenly people realize the party's over and stop spending, there could be real problems. |
|
| Back to top |
|
|
thepeel
Joined: 08 Aug 2004
|
| Posted: Mon Aug 13, 2007 2:14 am Post subject: |
|
|
I don't think the situation in the US is anything close to a mess. The people could stand to save more, and the government spend less (or, within her means) but the United States is still the world's largest manufacturer. NYC is still the financial capital of the world. The USA still produces the vast majority of the world patents. The USA still have 80 of the 100 best universities. The United States is an amazingly large, and diverse economy. Silicon Valley couldn't exist anywhere else. The medical research facilities dominate all medical research in the world.
I think the USA will be fine. It could have been better managed. Of course. But the fundamentals are still good. |
|
| Back to top |
|
|
Gatsby
Joined: 09 Feb 2007
|
| Posted: Mon Aug 13, 2007 3:41 am Post subject: |
|
|
Here we go again, the "America is the greatest nation in the world" thread.
BJWD
| Quote: |
| ...he United States is still the world's largest manufacturer. NYC is still the financial capital of the world. The USA still produces the vast majority of the world patents. The USA still have 80 of the 100 best universities. The United States is an amazingly large, and diverse economy. Silicon Valley couldn't exist anywhere else. The medical research facilities dominate all medical research in the world. |
Wow, sounds great!
Please send me directions how to enter your alternate universe!
Cause in the universe I live in the crooked CEOs plundered most of the U.S. corporations and research institutions, and outsourced most of the jobs, before being arrested and sent off to jail.
Let me tell you a little story. A friend of mine studied science at one of the top Ivy League unversities, earning a BS. He then earned a PhD from another Ivy League university. He was hired directly by one of the world's preeminent research facitilies, Bell Labs. He was internationally recognized as one of the leaders in his field of research. He was responsible for a basketful of patents for Bell Labs, some of which form the technical foundation for the telecommunications system you are using right now.
He is now working as a high school science teacher.
He was laid off along with hundreds of other scientists at Bell Labs due to the incompetence of the CEO of Lucent technogies. All she knew how to make was red ink. It wasn't the fault of researchers at Bell Labs that Lucent wasn't making money off its mediocre ink jet printers and business equipment that businesses didn't want. But they were the ones who paid the price.
Try getting a job if you are over 40 in the United States, no matter how competent you are. Corporations don't like to pay pensions. If you do get hired you should not plan of being kept around until you are 65. But these same companies lobby Congress for more visa waivers to let cheap foreign researchers into the country.
At least teaching public school you can get raises and a pension.
As to Bell Labs, heard much about it lately? Probably not. It is a shell of its former magnificent self, owned by something called Alcatel-Lucent, which "is incorporated in France, and has its global executive offices in Paris."
American research institutions? Gimme a break.
How many "American" companies are owned by Americans, incorporated in American, paying taxes in America?
How many "American" companies make products sold in America with American brand names that are actually made in America?
When was the last time you saw a television, radio, microwave, telephone, popcorn popper or even a spoon that was made in the good ole U.S. of A?
Hey, but we still make beef, wheat, potato chips, cigarettes, beer and motion pictures. So it's cool.
Go back to any street in the USA and count how many Hyundais there are vs. Chevrolets. There will probably be more of the Korean cars.
Forget the patents, universities, medical research.
What the hell are Americans making?
Wake up. Look around you. It's not the 1960s anymore.
The United States of America economy is hollow. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
