I saw again on the news today that Geithner is going to ask China for flexibility in their currency.
Now, when someone argues, it will allow the US to export more, export what, how exactly is the US competitive anymore anyway?
We don’t produce much anymore, we borrow their money to buy their products through the sale of Treasury Bonds.
Here is the article if anyone wants to read it, link is at the bottom:
Geithner to urge forex flexibility in China
Reuters
11 mins ago (on May 28, 2009 in the morning)
WASHINGTON (Reuters) – U.S. Treasury Secretary Timothy Geithner will discuss with top Chinese officials how to boost global economic growth as well as the importance of flexible exchange rates for smoothing imbalances, a senior U.S. Treasury Department official said on Thursday.
Geithner heads for Beijing this weekend and will hold two days of talks next Monday and Tuesday with senior Chinese leaders on a range of issues that may include China’s concerns over rising U.S. indebtedness, the official said.
(Reporting by Glenn Somerville, Editing by Chizu Nomiyama)
http://news.yahoo.com/s/nm/20090528/pl_nm/us_usa_china_2
Voice Of Reason: You are completely wrong, the US is the largest debtor in the world, we manufacture only a few percent of our GDP, the other 95%+ is the service sector, Treasury Bond sales, government debt spending, military spending, health care, and consumer debt spending. You should understand, our economy is ALL ABOUT BORROWING AND NOT PRODUCING and not being able to pay back what we borrow without printing new money.
Take notice that the same amount that we manufacture is the same amount we borrow in Treasury Bond sales.
America is a poor country, unfortunately, we are broke (if we couldn’t continue to print money), our GDP is all seemingly fake and seems to really represent the wealth we give away every year, and sooner or later, especially when China takes Geithner’s advice, we are going to see the entire fake economy fall right before our eyes.
Voice of reason: You are correct that we have increased farming productivity by an amazing amount, fewer people need to farm and we have more food to go around and that is a great thing because it frees up people to do new things.
But that is not the same thing that is happening in manufacturing products. We have lost an extraordinary amount of productivity due to competition from other countries and outsourcing. The productivity has increased but has increased in American companies (really multinational companies with their base in America) that do business outside the US and import the products back into the US. The steel and car industries are perfect examples of this trend.
We now import products we used to make, that’s not like farming at all where we have increased productivity and make more of the item with fewer people, we have given away much of our productivity and manufacturing ability, that’s not the same as increasing it domestically.
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