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Conspiracy Theory #1, (que Adam!)
I am starting to believe Bernanke is intentionally devaluing the dollar to reduce the trade deficit and increase exports.
The logic being that China has done this very thing (artificially devaluing the RMB) and their economy is booming. More cars sold in China than the US. 10% growth rate, much better standard of living year after year, etc…
China set to overtake US GDP in 10 years.
http://marketwatch.com/story/chinas-gdp-overtake-us-early
This isn’t a mistake, it’s Authoritarian Smart.
We’ve just decided to play by their rules.
Why does this cartoon sound 1000 times more rational then anything I have heard out of the Federal Reserve lately? There was a time when a plan to simply print more money would have been laughed of as a joke. Now it is presented as sound fiscal policy? WTF!
Oh, and another beautifully ironic twist to this:
China’s treasuries will be worth less, and if they try to dump these treasuries they will be worth even LESS!
So China is screwed every which way from Sunday.
They loose substantial exports, their holding are worth less, their influence is less, and they cannot dump what holding they already have:
While US exports increase, imports decrease, and US based business gets a boost.
I’m looking a 2+ trillion easing by the time all is said and done.
Steve, the world, or at least the playing field, has changed.
China, India, Brazil, etc. all taking advantage of you and me.
And we let them.
Don’t you have to make something in order to export it?
Many people think that their leaders are well intentioned but a bit stupid whereas the truth is just the opposite. That sticks out like a sore thumb here: Greenspan, Summers, Bernake, Geitner==the whole Clinton/Bush/Obama/Goldman Sachs team. In political theory, I think this is called a kleptocracy–aided and abetted by dimwitted LIEberTARDS and self destructive PUKES.
But it is a dismal science==can’t predict a dismal thing, for while we are circling the drain, so is everyone else. It seems prosperity and success is all relative in the economic universe that appears totally Newtonian.
Hah, hah. We are all bilge rats.
Why does a this animation sound more rational than the government?
I would like to be able to blame China and others for shafting America but the people running the Fed gov sold the country out and since we voted for the these people it is our fault.
Forty cents of every dollar spent by the Fed gov. is borrowed. Anybody think that can last much longer?
I give long term American bonds a Z rating.
Quite correct. We need to continue to spend as much as the ENTIRE REST OF THE WORLD on our military while spending as much as the ENTIRE REST OF THE WORLD on healthcare and finance this excess by further reducing the taxes paid by the top 2% in order to balance the equities of the middle class who have been given a free ride by not paying their share of income tax.
So many lies. Not effective at all unless the listeners are totally retarded.
Agrrree, best video yet.
Agree, without inflation to bring down the exported cost of US labor, there is no way the US economy can survive against Chinese etc. labor rates.
Agree, Goldman Sachs willfuck us every way to Sunday, but what can you do, as their competition folded in the last Bust thanks to US Gov. action.
I’m sure the lipstick wearing pig from Alaska will make it all better.
Fun part is “we need a VACUMME to fix it all”..
NOT politicians.
I gave up when he said “printing money is the last vestige of failing empires” or something. The US “printed” money as early as the revolutionary war.
Banks aren’t lending enough money, so the Fed is temporarily increasing the money supply. It’s nothing scary or terribly unusual, and nothing is actually being bought or borrowed. The downside is a temporary boost in inflation, but a lot of money is currently tied up in banks anyway.
What is it with people wanting to go back to the “good old days” when we had Major boom-panic cycles every decade?
“Best I’ve Heard” + “Made with Xtranormal” = Still awful.
#11,
iNCREASEING THE AMOUNT of money with NO backing tends to raise prices to the USA consumer… nothing else.
The prices have increased over 30% in the last 2 years, because of the SAME problem.
Its a Fast buck for the corps, who paid a Specific amount BEFORE this happened. They raise prices to pay for new goods. Make BIG profit margin at the same time.
For China to recoup our LOANS, at $XXXX amount, they must INFLATE their prices and value of money.. to make them EQUAL to the USA.. if they dont, our INFLATED VALUES will be LESS to them.
look AT IT THIS WAY.
Take $1..
Inflation is a BACKWARDS term..
WE make our $1 worth $0.10, by making 10 times itself worth.
wHAT HAPPENS TO food?
it goes up 10 times, to be EQUAL to what it was.
NOW..a loan at $1000, is now PUSHED back DOWN. its CURRENT VALUE is 1/10, as we inflated.
TO MAKE the loan SOLVENT..you must do the same to your OWN ECONOMY…inflate it.
So that the $1000 THAT EQUALED $100,000 YUEN..we inflate the YUEN..
Thats $1000 that NOW equals $100
The YUEN that WAS $100,000 now equal $1,000,000 in INFLATED value.
Its STUPID..
its because of 1 thing. OUR money has no REAL physical base for its VALUE. the USA dollar is based MOSTLY on the value of OIL.
PS..
the problem with Money based on OIL prices?
WAGES have no reference to it.
Wages:
1970 2007
$1.35 per hour $7
Oil:
1970 2007
$0.35 per gallon $2.50+
Explaining the left-right paradigm to a co worker!
#15
Ah but the REAL point of that video is that the co-worker ask if they could talk about anything else BUT what is wrong with their nation.
And THAT is why nothing changes.
People immediately want to go back to self-absorbed interests because they are frightened by the reality of the world.
Dream little monkeys. All is well. And there are bananas aplenty.
Cursor_
#16..
Its also the ASSUMPTION, that the persons we ELECT to do their BEST for us, is REALLY qualified.
In the OLD days these were farmers and business men, that WENT HOME when they were done, and went to work. It was an honor and PRIVILEGE to be a gov. representative.
They ALSO did their OWN work. they didnt have a 200+ person cabinet of people DOING THEIR WORK for/with them.
Pretty lame and boring…and mostly lopsided.
Still, kudos for using cartoons to train the sheeple on basic economic terms.
The simplest answer is that the world governments want a one world currency. How do you do that? First you have to get rid of the current system. How do you do that? Collapse the old one and then start over. Just my theory and I am totally open to correction on this. Just seems that it would be the reason for this madness.
Just one effing detail, that rubs me the wrong way every time I hear it:
Just how the HELL do you expect to compete with the chinese in labour costs??!!???
What does a normal American worker in an assembly line makkes??? … ah hun… and NOW, how much does a Chinese employee makes in an assembly line making the SAME SHIT??? Oh yeah? …so… how can they even compete?
One other detail… If you want to drive exports, doesn’t that implies that some PRODUCTION might be involved??? Go check all your apliances and see which one are NOT made in china… soooo…
Isn’t this DUMB, or is it just me?
Gotta love them Democrats!
**goes back to polishing his AK47**
JoaoPT,
Most of the points on Chinese labor costs are only a small part of the puzzle and wildly out of date.
Hold on for a lengthy explanation.
The companies I deal with in China are mostly manufacturing. They use the same HAAS machining centers we use here in the US.
They produce the same part as their American counterpart but can get it to us for 1/3 less. Why?
1. Cheaper labor. The LEAST significant part of the equation. When a part is manufactured, it is done in batches. 500 parts a shift with one operator on one machine.
Each part costs ~$10 for a total of $5,000 of production/shift.
Now the labor in China comes out to ~$16/shift whereas in our American shop ~$96/shift.
The percentage labor to production cost in China is 0.32% while in America it is 1.92%, still less than 2%
What actually drives the Chinese savings are raw materials cost and infrastructure/business costs.
The raw materials cost in China is typically 40-50% less! This is because Electricity, mining, and production of materials such as steel and aluminum is state controlled and held undervalued.
So take off $1.50 from the Chinese production cost per unit.
Next, the overhead in China is much less because they pay ~2/3 LESS in taxes. 17% max compared to our ~35%. Take off another 1/3 or $0.75 for less overhead.
This gives true Chinese production cost at $6.75/each. Here is the real problem. Their stuff costs ~ 32.5% less on materials and overhead due to state control. The cost of labor is insignificant compared to this.
This of course applies to manufacturing and not painting eyes on dolls, but manufacturing is also their most profitable.
What counterbalances this inequality is shipping and handling. After all, the Chinese live in China! They still have to crate, handle, ship halfway around the world, uncrate, and ship to the final destination. This all cost substantial money.
So, we as a country need to level the playing field in cost of production and we prevail.
To finish my last thought.
Therefore it’s not the labor which is significant, it’s the cost of production.
But when shipping and handling from China to Wal-mart is figured in, the cost is still less but not by much and having the part manufactured in America become much, much more attractive. Often the cost of manufacturing can be cheaper in the US except for one thing….
The Chinese dollar, the RMB. It is being held artificially low. Up to 40% by some estimations.
Here is where a significant price difference comes in. 40% less because of the Chinese dollar!!
And one last thought.
Corporate greed.
WalMart may be getting the Chinese product for 40% less (because of the undervalued RMB), but they SELL the product for only 20% less and keep the other 20%.
Corporate greed, the destruction of America.
No surprise. Corporations going international to undercut America and pocket the difference.
#22,
good points..
Lets add some facts also..
Tariffs, coming to the USA adds abit of Cost to the product, as a restriction…
UNLESS, they do a few things.
And if you have a VERY expensive product isnt worth doing..as in shipping from China to a FREE PORT, reloading and getting NO TAX on the goods. To shipping PARTS, that arent taxed, and are assembled HERE, and a few other tricks.
Also the Thought that LOW priced goods, that DO get to the USA, and companies that CHARGE 10 times the COST, as a SELL price..as IF’ it was made in the USA. THEN whom is making ALL the money?
In the end, The corps Have things made OVER THERE..for a few reasons, but they come down to 1 point. PROFIT. NOT that it is cheaper THERE and it would be BETTER/CHEAPER to the consumer.
In the USA we dont believe in INTERNATIONAL pricing.. we inflate EXPORTS as well as IMPORTS. we dont believe in NATIONAL pricing, EITHER.. IF we sell Goods to another nation at an INFLATED PRICE, we match it NATIONALLY..thats what happened to WOOD and metal prices. and killed HOUSING and building in this nation..
Yea,
Labor is an end-to-end cost.
Dig up the minerals, and the fuel to convert the raw material to a useful form, have labor costs that factor into final cost, and on an on. Even the costs of building the factory, includes a lot of labor costs.
I have a WAG that all stuff, in terms of end-to-end manufacturing cost, is 80% labor costs.
So your argument that manufacturing cost reductions, of building stuff in China, are not significant falls apart when you start to think of the total labor cost of
building anything.
#26,
do you want to SCARE USA corps..
REQUIRE, that the companies we deal with in other nations, BUILD/LIVE/are run by the environmental LAWS/regulations created in the USA. You would TRIPLE the cost of goods.
we went thru this in the 60-80’s…and MOST of the corps WENT OUT of country, because of all the regulations. esp. for the disposal of pollutants.
The dollar devaluing outcome is not as simple as the goldbugs would tell you.
Sure the us$ has gone down a bit, but it is market behaviour that is occurring and not a fundamental mechanism at play. Ie the markets are US-centric and are manipulated.
The thievery at play is the stealing of the future generation in that they are purchasing bad bonds that halve in value immediately, and the big boys get to play with the yields (% interest of halved value bonds that they purchase).
We need to know the likely outcome, and the goldbug devalued dollar (I mean 10% not 80%) is not remotely likely given the real market monster.
I believe what is going to happen is QE2, QE3, QE4, … all these escalate because the short term bonds (5-7 years) are coming back, requiring repurchase (at fraction of the original, the main).
So this is a continuous defaulting thievery. The escalation will stop in the near future by its own as there cannot be an unlimited tolerance of theft.
Hey! Where the hell is the luxury British Cruise Chip?!?
#30 I said I support cartoons to train the sheeple but this one is done poorly and lopsided. Sheeple are unlikely to comprehend that there is not such thing as magical math when it comes to a balanced budget.
For instance, tax cuts equate to deficits w/o corresponding spending cuts. Sheeple just think ‘tax cuts’ , yay! Pretty sad, IMHO.
Do sheeple realize that we spend more in military than the next 28 countries – COMBINED? Never mind that 27 of those are allies. No, but the sheeple are scared.
Do sheeple realize that Medicare and Medicaid entitlements need to also be cut to balance the budget? lalalalalalalala. Don’t want to hear that because the sheeple are also sick and old!