Why does Geithner keep asking China to raise their currency's value, why make our problems in the US worse?
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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Filed under: Forex News
We don’t produce much anymore,???
WTF are you talking about?You need to do your homework sunny Jim, the US is still the largest manufacturer on the planet nimrod
Bullsh!t, worriers like to complain that we don’t make anything anymore. America is being hollowed out. Soon we’re going to be left doing one another’s laundry. Boy, will we be poor then.
At the heart of this concern is the belief that manufacturing is the key to an economy’s success. You have to make stuff. You can’t just move it around or sell it. A nation of services is a poor nation.
In fact, there is no gold-medal industry that is the key to economic prosperity. In 1900, agriculture employed 40% of the American work force. America was pretty prosperous in 1900 relative to the rest of the world. You might have thought that farming is the road to material well-being for a nation. You would have been wrong, of course. Today, agriculture is 2% of the American work force and we are seven to thirty times richer as a nation compared to 1900.
But there is a second confusion in the worriers’ worries, one that I deliberately made in the previous paragraph. You want to distinguish between employment and output. We grow a lot more food today in America than we did in 1900. You also want to distinguish between total employment in a sector and that sector’s employment as a proportion of total employment.
Over the last five years, manufacturing employment has fallen even more dramatically, from about 17 million to under 15 million workers. But manufacturing output is rising:
This series from the BLS starts in 1987 and you have to realize right off that it’s a guess at best. It’s aggregating cars, refrigerators, bed frames and computer chips to get an overall index of total output. But it’s the best we can do.
The index climbs about 50% since 1987. It dipped in 2001 with the recession, but total output has already outpaced the level of 2000.
The bottom line is that we aren’t being hollowed out. We still make stuff. A lot of stuff. A lot more stuff than we did 20 years ago. We’re just doing it with fewer people. How? Productivity. We’ve found ways to make workers more productive so even though fewer people are doing the manufacturing, they’re producing more. Technology and innovation, spurred by the carrot of profits and the stick of losses has allowed that transformation. It makes us richer. It frees up a very scarce resource, people, to go do other things creating new products and services.
Well, the good news is that Geithner knows what he is doing. He has to give an account to the USA in a time of great crisis; you get to sit and ask long questions. If China does what Geithner wants, it would greatly help our economy.
China wants something and boy blunder will give it away.
We don’t export more cause no one buys at the prices that we produce.
We are increasingly copying a third world country model: exporting raw material (scrap metal) and importing finished goods from China.
Loosening China’s grip on our dollar will allow us to produce and export more thus not only increasing GDP but also reducing unemployment.