Is China Losing the Trade War?

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Re: Is China Losing the Trade War?

Post by Godjira » Mon Jul 02, 2018 11:26 pm

That’s true. I actually had a TV that I threw away when I left for Japan that said “Made in USA” on the back.

You haven’t been able to get one of those since the 80’s.
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 1:53 am

Citizen Baba wrote:
Mon Jul 02, 2018 11:23 pm
Yeah, in the 80s, manufacturing was a much bigger percentage of our GDP. You don't need a factory here to gain access to the market.
No but domestic factories eliminate the threat of tariffs, advances in factory automation negates the low wage advantage plus there are time and distance advantages. Bad for the shippers but good for micro mills and local shops. The disadvantages the US faced were high corporate taxes and oppressive regulations and President Trump fixed that.
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Re: Is China Losing the Trade War?

Post by Citizen Baba » Tue Jul 03, 2018 2:00 am

twodogs wrote:
Tue Jul 03, 2018 1:53 am
Citizen Baba wrote:
Mon Jul 02, 2018 11:23 pm
Yeah, in the 80s, manufacturing was a much bigger percentage of our GDP. You don't need a factory here to gain access to the market.
No but domestic factories eliminate the threat of tariffs, advances in factory automation negates the low wage advantage plus there are time and distance advantages. Bad for the shippers but good for micro mills and local shops. The disadvantages the US faced were high corporate taxes and oppressive regulations and President Trump fixed that.
Yet growth is down.

What are some of the oppressive regulations that Trump removed?

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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 2:07 am

Godjira wrote:
Mon Jul 02, 2018 11:26 pm
That’s true. I actually had a TV that I threw away when I left for Japan that said “Made in USA” on the back.

You haven’t been able to get one of those since the 80’s.
Yep manufacturing went to Japan for a while now South Korea is on top followed by China. There are huge investments in Vietnam as present so I suspect they will lead the world eventually.
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Re: Is China Losing the Trade War?

Post by Citizen Baba » Tue Jul 03, 2018 2:11 am

twodogs wrote:
Tue Jul 03, 2018 2:07 am
Godjira wrote:
Mon Jul 02, 2018 11:26 pm
That’s true. I actually had a TV that I threw away when I left for Japan that said “Made in USA” on the back.

You haven’t been able to get one of those since the 80’s.
Yep manufacturing went to Japan for a while now South Korea is on top followed by China. There are huge investments in Vietnam as present so I suspect they will lead the world eventually.
I thought they were coming back to the US?

Automated manufacturing may bring back a few jobs, but they won't be for Cletus who found high school too difficult.

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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 3:31 am

Citizen Baba wrote:
Tue Jul 03, 2018 2:11 am
I thought they were coming back to the US?
The third industrial revolution is changing manufacturing from global to local. Asia will produce products for Asia, Europe will produce products for Europe and so on. Why build a car in Germany or Japan and ship it halfway across the globe when it can be built where it is used.
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Re: Is China Losing the Trade War?

Post by Citizen Baba » Tue Jul 03, 2018 3:35 am

twodogs wrote:
Tue Jul 03, 2018 3:31 am
Citizen Baba wrote:
Tue Jul 03, 2018 2:11 am
I thought they were coming back to the US?
The third industrial revolution is changing manufacturing from global to local. Asia will produce products for Asia, Europe will produce products for Europe and so on. Why build a car in Germany or Japan and ship it halfway across the globe when it can be built where it is used.
Easy: because it’s cheaper. Keep the dream going though. They can never take that away from you.

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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 3:40 am

Not when you add in tariffs and shipping costs. That is why all of the following companies are building cars and trucks in the US.

1 General Motors Company
2 Ford Motor Company
3 Fiat Chrysler Automobiles
4 Tesla Motors
5 AM General
6 Toyota Motor Corporation
7 Honda Motor Company
8 Nissan Motor Company
9 Mazda Motor Corporation
10 Subaru Corporation
11 Hyundai Motor Company
12 Kia Motors
13 Volkswagen Group
14 Volvo Cars
15 BMW Group
16 Daimler AG
17 Hino Motors
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Re: Is China Losing the Trade War?

Post by Citizen Baba » Tue Jul 03, 2018 3:52 am

Yet, we had 2% growth last quarter and China had over 6%.

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Re: Is China Losing the Trade War?

Post by Godjira » Tue Jul 03, 2018 4:04 am

twodogs wrote:
Godjira wrote:
Mon Jul 02, 2018 11:26 pm
That’s true. I actually had a TV that I threw away when I left for Japan that said “Made in USA” on the back.

You haven’t been able to get one of those since the 80’s.
Yep manufacturing went to Japan for a while now South Korea is on top followed by China. There are huge investments in Vietnam as present so I suspect they will lead the world eventually.
How does this fit into your local manufacturing plan?
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 12:20 pm

Gadgets will be one of the last things that return if they ever do.
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 12:25 pm

"There’s more than one way to fight a trade war. China’s yuan slumped to its weakest value against the U.S. dollar in nearly a year. The currency’s drop follows the imposition of tariffs and rising trade tensions between the countries. The Trump administration sees China as a fairly juicy target for tariffs—China exported $505.5 billion in merchandise to the U.S. last year while the U.S. exported $129.9 billion to China. China could run out of stuff to hit with levies while the U.S. is still warming up. Beijing, of course, has other tools, including currency devaluation, regulations and Treasury purchases. A cheaper yuan effectively makes U.S. goods more expensive in China, and Chinese goods cheaper in the U.S., erasing some of the tariffs’ impact. Big caveat: China wants to avoid destabilizing capital flight, as happened after Beijing allowed a sudden drop in the currency in August 2015."

So if you were a global investor where would you put your money?
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Re: Is China Losing the Trade War?

Post by Godjira » Tue Jul 03, 2018 12:31 pm

Isn’t a weak Chinese currency good for Chinese trade?
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 4:39 pm

Godjira wrote:
Tue Jul 03, 2018 12:31 pm
Isn’t a weak Chinese currency good for Chinese trade?
Yes if the market is open but tariffs can offset all of that with a stroke of a pen. As the last post stated: "China wants to avoid destabilizing capital flight, as happened after Beijing allowed a sudden drop in the currency in August 2015."

Smart money is already leaving China in droves.

"Among Chinese millionaires with a net worth of more than $1.5 million, half either plan to or are considering moving abroad, according to a survey from Hurun Report in association with Visas Consulting Group. The survey suggests that the flow of wealthy Chinese and Chinese fortunes into U.S. homes and buildings is likely to continue, helping demand and prices in certain real estate markets — especially in the U.S.

The U.S. remains the most popular destination for wealthy Chinese moving their families and fortunes abroad, according to the report. Canada ranks second, overtaking the U.K., which had ranked second but now ranks third. Australia comes in at fourth."
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Re: Is China Losing the Trade War?

Post by cuchulainn » Tue Jul 03, 2018 4:43 pm

Why does Trump have his paraphernalia made in China?

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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 4:47 pm

cuchulainn wrote:
Tue Jul 03, 2018 4:43 pm
Why does Trump have his paraphernalia made in China?
Up until now it was cheaper but it looks like that is changing which is good new for the ASEAN nations.
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 7:39 pm

So will the U.S. beat China in this battle? Yes, says storied investor Mark Mobius for our call of the day.

“I think at the end of the day, the U.S. is going to win this one, because the U.S. is the biggest importer in the world, and China needs the U.S.,” he told CNBC in an interview late yesterday.

“Winning means getting some concessions and a reduction in the trade deficit,” Mobius says.

“I agree with him completely,” Mobius says, referring to Trump. “The U.S. has been taken for a ride — let’s face it — over the last 20 or 30 years. It’s time to start saying, ‘Look, there has to be some reciprocity between these two countries, because it’s just crazy to have this kind of deficit.’”

“What I would buy now is those countries who are going to be exporting to the U.S. instead of China — like Bangladesh , Turkey TUR, -2.29% , Vietnam VNM, -3.69% ,” Mobius says. “These are all big producers of garments and shoes and consumer goods.”
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Re: Is China Losing the Trade War?

Post by Godjira » Tue Jul 03, 2018 10:36 pm

So, now it will be $50 for a shitty SMEGMA hat?
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 11:31 pm

Not likely. The dollar is rising against most currencies and the US still trades with the other ASEAN nations who routinely undercut China on price.
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Re: Is China Losing the Trade War?

Post by Godjira » Tue Jul 03, 2018 11:37 pm

Which currencies is the dollar rising against?
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Re: Is China Losing the Trade War?

Post by twodogs » Tue Jul 03, 2018 11:43 pm

The Yuan.
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Re: Is China Losing the Trade War?

Post by Godjira » Tue Jul 03, 2018 11:48 pm

That is currency. You said currencies.

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Re: Is China Losing the Trade War?

Post by guruwil » Wed Jul 04, 2018 12:01 am

twodogs wrote:
Tue Jul 03, 2018 11:31 pm
Not likely. The dollar is rising against most currencies and the US still trades with the other ASEAN nations who routinely undercut China on price.
China is not an ASEAN nation btw.
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Re: Is China Losing the Trade War?

Post by twodogs » Wed Jul 04, 2018 2:20 am

guruwil wrote:
Wed Jul 04, 2018 12:01 am
China is not an ASEAN nation btw.
I am aware of that. Had some interesting conversations when I was in southeast Asia earlier this year and was impressed as how well this loose alliance works. Vietnam seems more anti China than the rest.
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Re: Is China Losing the Trade War?

Post by twodogs » Wed Jul 04, 2018 4:03 pm

This article does not factor in the new tariffs so expect an even larger increase in on shoring.

A study by Pepperdine University tells an interesting story about the coming end of the 'Made in China' era. Increasing wages, higher production costs, and ever-present overseas shipping expenses are all working against China's efforts to maintain its position as preferred provider of materials and products.

Charis Atwood, Director of FF&E at TynanGroup, Inc., explains, "Recently, several of our clients have asked us to purchase specifically from US-based FF&E vendors. We are happy to comply with this request for several reasons: Orders can often be fulfilled sooner, we can resolve issues more easily with local suppliers, customs is not an issue, and the cost is still competitive once you add in shipping and travel expenses for overseas FF&E."

"From a shipping and transportation standpoint, when US companies start to bring back their product and material orders from China, and source them domestically, they will streamline their logistics profile tremendously. No international borders to cross, no interruptions, no inspections, no losing critical windows of opportunity,"
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Re: Is China Losing the Trade War?

Post by misanthrope » Thu Jul 05, 2018 12:30 am

Mobius is right. THis has gone on far too long. Of course the US is going to win this one they have a tremendous advantage going in. The same is true with every other nation that runs a surplus with the US.

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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 2:45 pm

misanthrope wrote:
Thu Jul 05, 2018 12:30 am
Mobius is right. THis has gone on far too long. Of course the US is going to win this one they have a tremendous advantage going in. The same is true with every other nation that runs a surplus with the US.
Everyone wins environmentally and by becoming more self reliant.
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Re: Is China Losing the Trade War?

Post by cowtown » Fri Jul 06, 2018 4:00 pm

I have not followed this thread because two dogs is a shit show but this trade war will be on the backs of labor so China will win and American workers will pay the price

and so it starts
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 4:19 pm

cowtown wrote:
Fri Jul 06, 2018 4:00 pm
I have not followed this thread because two dogs is a shit show but this trade war will be on the backs of labor so China will win and American workers will pay the price

and so it starts
Any reason why? The US has a labor shortage, China does not.

The US imports more from China than China imports from the US so even if all trade stops the US will benefit.

The shipping companies are primarily Chinese which is one hit the US will not have to take.

This isn't an embargo. If a tarrif rises 25% and the price drops 25% then it is business as usual.

Neither side is going to "surrender" eventually concessions will be made and trade will resume with the US in a better position than it was before.
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Re: Is China Losing the Trade War?

Post by DCComic » Fri Jul 06, 2018 4:34 pm

If the balance of trade is uneven and tariffs are symmetrical and have a symmetrical effect, the USA will lose affordable manufactured products and China will lose Dollars. China has been stockpiling US currency for years.
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 4:47 pm

DCComic wrote:
Fri Jul 06, 2018 4:34 pm
If the balance of trade is uneven and tariffs are symmetrical and have a symmetrical effect, the USA will lose affordable manufactured products and China will lose Dollars. China has been stockpiling US currency for years.
Any essential "affordable manufactured products" can be made in the US or imported from a country other than China.
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Re: Is China Losing the Trade War?

Post by DCComic » Fri Jul 06, 2018 4:50 pm

twodogs wrote:
Fri Jul 06, 2018 4:47 pm

Any essential "affordable manufactured products" can be made in the US or imported from a country other than China.

Of course they can. They'll just cost more.
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Re: Is China Losing the Trade War?

Post by section8 » Fri Jul 06, 2018 5:02 pm

I'm interested to see how this plays out. On one hand, tariffs haven't been used to this extent in nearly a century, and it is a 180 degree turnaround in economic policy by the republicans who have gone from Free Trade fundamentalists to Bernie Sanders style protectionists.

On the other hand, key indexes are showing that the economy is due for a contraction after a decade of steady growth, and interest rates are going up. Recessions usually need something to trigger a drop in confidence - will the trade war do that, or will things be business as usual?
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Re: Is China Losing the Trade War?

Post by cowtown » Fri Jul 06, 2018 5:15 pm

It’s a very Hugo Chavez, Kirchner commie move by Trump
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 5:19 pm

DCComic wrote:
Fri Jul 06, 2018 4:50 pm
twodogs wrote:
Fri Jul 06, 2018 4:47 pm

Any essential "affordable manufactured products" can be made in the US or imported from a country other than China.
Of course they can. They'll just cost more.
I am not so sure. I was in Vietnam earlier this year and it reminded me of China in 90's.

"Vietnam is just starting its journey up the value chain as it models successful development policy by China and South Korea – Vietnam’s largest foreign investor. Vietnam’s stable governance easily outshines competitors such as Cambodia and Myanmar for all but the lowest-cost manufacturing. Investors will also find Vietnam to be consistently more receptive to foreign investment than regional competitors such as Indonesia.

Vietnam’s largest asset for investors is its network of trade agreements. Electronics exemplify this advantage. Complex components can be sourced from China, Malaysia, Singapore or Korea (all of which enjoy FTAs with Vietnam) and then assembled in Vietnam with cheaper components that are sourced or produced in country. Vietnamese assembly and limited production is usually sufficient to satisfy rules-of-origin provisions under Vietnam are various FTAs.

Companies employing this model of operation in Vietnam are often at a significant advantage over their counterparts operating exclusively in China. While Chinese talent pools run deep, increased operational costs and imposition of import duties by key import markets result in a clear cost advantage for companies that assemble in and export from Vietnam."
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Re: Is China Losing the Trade War?

Post by cowtown » Fri Jul 06, 2018 5:21 pm

twodogs wrote:
Fri Jul 06, 2018 4:19 pm
cowtown wrote:
Fri Jul 06, 2018 4:00 pm
I have not followed this thread because two dogs is a shit show but this trade war will be on the backs of labor so China will win and American workers will pay the price

and so it starts
Any reason why? The US has a labor shortage, China does not.

The US imports more from China than China imports from the US so even if all trade stops the US will benefit.

The shipping companies are primarily Chinese which is one hit the US will not have to take.

This isn't an embargo. If a tarrif rises 25% and the price drops 25% then it is business as usual.

Neither side is going to "surrender" eventually concessions will be made and trade will resume with the US in a better position than it was before.

You answered it yourself, China doesn’t have a labor shortage and they pay their labor much less if both sides of the equation suffer, American labor has far more to lose

Tariffs will also make goods more expensive in America, the Chinese government will absorb those costs, US businesses will pass them on. US labor will be cut and then loss of their purchasing power and tax base so in effect, the individual American labor is going against the entire Chinese government, they will lose

The rest of that shit, is populist nonsense that’s a tell you don’t know shit

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Re: Is China Losing the Trade War?

Post by DCComic » Fri Jul 06, 2018 5:23 pm

If the US could buy a thing from Vietnam as cheaply as it could from China, it would. The tariffs on Chinese goods would only matter if the Chinese product was the better deal.
So Vietnam is better, China loses what it would have anyway, but at least has the compensation of reciprocal tariffs on imports from the US.
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 5:35 pm

"Conventional economic wisdom suggests that trade wars hurt exporting countries more than importers, because if both sides impose equal and opposite tariffs, the country that exports more has more to lose. This explains, at least partly, why the US dollar has strengthened in the last few months. As the world’s biggest importer, in theory the US has the least to lose from a trade war.

But does the theory work in practice? Abacus examined two weeks ago how difficult it will be for China to retaliate if Donald Trump follows through on all his tariff threats. China simply doesn’t buy enough from the US to impose proportionate tariffs in response. And although Beijing can target the Chinese operations of US companies – Apple sells more iPhones in China than the US, GM more cars – these products are manufactured locally, so Beijing would be harming its own economy more than the US."
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Re: Is China Losing the Trade War?

Post by cowtown » Fri Jul 06, 2018 5:55 pm

twodogs wrote:
Fri Jul 06, 2018 5:35 pm
"Conventional economic wisdom suggests that trade wars hurt exporting countries more than importers, because if both sides impose equal and opposite tariffs, the country that exports more has more to lose. This explains, at least partly, why the US dollar has strengthened in the last few months. As the world’s biggest importer, in theory the US has the least to lose from a trade war.

But does the theory work in practice? Abacus examined two weeks ago how difficult it will be for China to retaliate if Donald Trump follows through on all his tariff threats. China simply doesn’t buy enough from the US to impose proportionate tariffs in response. And although Beijing can target the Chinese operations of US companies – Apple sells more iPhones in China than the US, GM more cars – these products are manufactured locally, so Beijing would be harming its own economy more than the US."
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Re: Is China Losing the Trade War?

Post by misanthrope » Fri Jul 06, 2018 10:15 pm

2Dog is fighting the tide of ignorance here, but he is right. The surplus nation is the one in trouble. The Chinese have a lot more to lose and they know it.

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Re: Is China Losing the Trade War?

Post by Godjira » Fri Jul 06, 2018 10:50 pm

It’d be funny if China cashed in its bonds and Trump had to raise taxes to pay them.
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 10:54 pm

Godjira wrote:
Fri Jul 06, 2018 10:50 pm
It’d be funny if China cashed in its bonds and Trump had to raise taxes to pay them.
No need to raise taxes. Just QE them away like Obama did. I prefer to see it done over 10 years but all at once would work.
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Re: Is China Losing the Trade War?

Post by Godjira » Fri Jul 06, 2018 10:58 pm

But that didn’t really happen.
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 11:02 pm

misanthrope wrote:
Fri Jul 06, 2018 10:15 pm
2Dog is fighting the tide of ignorance here, but he is right. The surplus nation is the one in trouble. The Chinese have a lot more to lose and they know it.
We both have huge domestic markets, China is well positioned to find other customers and the US can produce anything it needs or wants so neither of us are going to "suffer". Prices my increase a few percent but that will just reduce consumption with leads to the next point.

The big winner will be the environment as more and more goods are produced locally reducing everyone's carbon footprint. I am surprised the left isn't applauding this fact and thanking President Trump for his efforts.
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Re: Is China Losing the Trade War?

Post by Godjira » Fri Jul 06, 2018 11:07 pm

Remember the Simpsons where they predicted the Trump presidency? Well, they also predicted the impending debt crisis.
That's the kind of bold flavor they enjoy in Albuquerque!

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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 11:08 pm

Godjira wrote:
Fri Jul 06, 2018 10:58 pm
But that didn’t really happen.
Between 2008 and 2015, the US Federal Reserve in total bought bonds worth more than $3.7 trillion.

The U.S. debt to China is $1.19 trillion as of March 2018.

Peanuts.
More irrational spitefulness coming from twodogs...

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Re: Is China Losing the Trade War?

Post by Godjira » Fri Jul 06, 2018 11:09 pm

2dogz and Miss Ann can come back to the US and assemble nano-electronics for $1 an hour. The pay is low, but you can make it up in the volume of hours.
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Re: Is China Losing the Trade War?

Post by twodogs » Fri Jul 06, 2018 11:22 pm

Not sure how this guys credentials compare to the naysayers here but for what it is worth:

Cramer, the host of “Mad Money,” contended the time is right for the president to engage China on trade because the U.S. economy is so strong.

"There are a lot of companies that are doing quite well in the country. And I think if you're going to take on the Chinese you do it from strength. And we have much more strength than they do,” he said. “Look at 211,000 jobs on average the last three months, this economy is very strong.”

Ahead of the jobs report, economists were already pointing to an economy gaining steam. CNBC’s Rapid Update tracker put the expected advance in gross domestic product at 3.8 percent for the second quarter.
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Re: Is China Losing the Trade War?

Post by misanthrope » Fri Jul 06, 2018 11:44 pm

China can't just decide to "cash in bonds". It could sell them. And they would find willing buyers around the world looking to mitigate risk.

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Re: Is China Losing the Trade War?

Post by misanthrope » Fri Jul 06, 2018 11:45 pm

Godjira wrote:
Fri Jul 06, 2018 11:09 pm
2dogz and Miss Ann can come back to the US and assemble nano-electronics for $1 an hour. The pay is low, but you can make it up in the volume of hours.
I won't be doing any such thing, but there are a lot of things that can be manufactured in the US. Or done in countries that don't revel in stealing intellectual property.

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