China Devalues Currency: What Are The Consequences?

[The Big Daddy C-Master]

Thoughts?

[magicattack]

My personal thoughts are that China, in their mind, has no reason to want to raise the value of their currency. The people are forced to Work at a far lower wage than the rest of the world. The people in charge are the ones reaping the benefit.

Why would the government ever want to change that?

[The Big Daddy C-Master]

Aug 14, 2015 12:31:41 GMT -5 magicattack said:

My personal thoughts are that China, in their mind, has no reason to want to raise the value of their currency. The people are forced to Work at a far lower wage than the rest of the world. The people in charge are the ones reaping the benefit.

Why would the government ever want to change that?

China would be better with a strong currency since they would have more purchasing power. The countries living off of it most certainly do *not* want that. America is #1 on that list since we get them to paint our fence for us. Otherwise we would need to do it. We've lived WAY above our means for too long.

[magicattack]

Aug 14, 2015 12:59:02 GMT -5 The Big Daddy C-Master said:

Aug 14, 2015 12:31:41 GMT -5 magicattack said:

My personal thoughts are that China, in their mind, has no reason to want to raise the value of their currency. The people are forced to Work at a far lower wage than the rest of the world. The people in charge are the ones reaping the benefit.

Why would the government ever want to change that?

China would be better with a strong currency since they would have more purchasing power. The countries living off of it most certainly do *not* want that. America is #1 on that list since we get them to paint our fence for us. Otherwise we would need to do it. We've lived WAY above our means for too long.

Why would the Chinese government want to give *any* power to its people?

[The Big Daddy C-Master]

Aug 14, 2015 13:05:00 GMT -5 magicattack said:

Aug 14, 2015 12:59:02 GMT -5 The Big Daddy C-Master said:

China would be better with a strong currency since they would have more purchasing power. The countries living off of it most certainly do *not* want that. America is #1 on that list since we get them to paint our fence for us. Otherwise we would need to do it. We've lived WAY above our means for too long.

Why would the Chinese government want to give *any* power to its people?

China is a lot more free market than it used to be. It's more communist in name only. America is more socialist than free. We're just capitalist in name only.

I don't see how the Chinese government loaning us money to buy their products really benefits them. What do we give them in exchange? They own a lot of our debt as it is. We're coming out on top of this deal, considering we have more debt than all of the debtor nations combined and we don't really manufacture/export very much. How many items do we have in America that were made in America? Not very many.

We can't live like this forever though.

[magicattack]

Yes. And once the price of the Chinese goods increases they become less attractive.

The term is state capitalism. Socialism at its finest. Marx would be proud.

[The Big Daddy C-Master]

Aug 14, 2015 13:58:11 GMT -5 magicattack said:

Yes. And once the price of the Chinese goods increases they become less attractive.

The term is state capitalism. Socialism at its finest. Marx would be proud.

"State Capitalism" is fascism, which is what we have since we don't have voluntary markets. It's just another form of socialism. Also China props up our dollar by purchasing our bonds. It helps keep faith in our purchasing power.

In America we were more free in the past. At our most productive we paid the highest wages, and sold the cheapest goods. Marxist economists and professors often say we should just print more and more money so that we become more productive trade partners. When we do this that means our own standard of living suffers. The reason that countries devalue currencies is not so much for their own trade reasons. It's because they want to steal from their own citizens to use the money for their own ends. That's why we've had zero percent interest rates for so long and such high inflation. It's how the government steals from us and does with the money whatever it pleases.

It doesn't hurt China since we don't "buy" their goods. What we do is we borrow money from them and then we borrow more money to pay back the borrowed money we took before plus interest. It's essentially a Ponzi scheme.

Say you loan me $1000 this year for whatever reasons. Then you come to me a year later asking me for the money back and I ask you for $1100 and then I offer to pay you interest. Year after year. In effect I'm not paying you back. I'm just borrowing more money and pretending to pay you back. I'm benefiting at your expense. Especially if I'm borrowing the money and buying your goods you produce for me.

What's happening is that China is lowering their standard of living to prop our standard of living. They're not helping themselves since they get nothing in return. What do we produce here? We're essentially like other socialist countries (Greece) the difference is that we have a printing press and can print money, and that we've found a smarter way to "borrow'. The reality is that we can never pay this money back and definitely not with high interest rates, so we like the deal.

It seems the other point of view is that China is doing this to remove itself from the US dollar that it's propping. If that's the case it could be much worse.

[magicattack]

I guess you don't see it.

[The Big Daddy C-Master]

Aug 14, 2015 16:21:50 GMT -5 magicattack said:

I guess you don't see it.

I think you're missing the picture. America benefits from this arrangement and not China. Most Americans think we're doing them a favor by consuming things we don't pay for. They make the food on the island and we eat the food and do nothing else.



I mean if you want to loan me money and loan me money to pay you back the money I borrowed in the future I'll sign up for it.

Keep in mind China can consume what it produces instead of just exporting it to a country who won't ever pay them back. I don't see it as a Chinese conspiracy to keep their own people down. The Asian economy is growing more and more overall (yes it still has flaws) but it's rising while America is falling. Especially places like Hong Kong and Singapore. Many people like doing business over there and I think that's going to continue. Especially if they drop the dead weight of the US.