[Samseau]

(03-22-2016 03:23 AM)Phoenix Wrote:  

You know, all this bullshit would magically disappear if we went back on the gold standard.

Many people talk about getting the money out of politics. What we really need is getting the politics out of money.

And guess who owns most of the world's gold right now? I'll give you a hint, it begins with the letter J.

[Travesty]

Jesus?

[Samseau]

(03-22-2016 01:31 AM)ElJefe Wrote:  

(03-18-2016 11:18 AM)Samseau Wrote:  

False. All that the currency peg does to the Danes is hide the true value of their mark relative to the Euro which means they will either pay too much or too little relative to other goods in the market.

Simply amazing at how badly you've contradicted yourself in this thread. First you claim to be for free trade and anti-tariff, then you defend currency manipulation. The contradiction is so bad it borders on insanity.

Lol. Samseau, you're keyboard jockeying. You don't even understand what I'm writing because you're just too eager to disagree for the sake of disagreeing.

If you think the topic is interesting, I strongly suggest some basic trade courses on economics. Whether you agree or not, it will under any circumstance strengthen your arguments, even if you're against free trade.

Unfortunately, I don't have time to go into depth on this. You're an intelligent guy, so I'm sure you understand developing one's ideas about how the world works in an intellectual vacuum is a bad idea.

(03-22-2016 02:33 AM)ElJefe Wrote:  

This video offers useful commentary on most of Trump's positions.

To be clear: I'm in favor in tariffs because it reduces the progressivity of the US tax code, and ONLY if those tariffs are used to reduce the corporate tax rate (not personal income tax rates).

I'm keyboard jockeying when you have yet to offer a single argument in this thread? If I'm being a jockey then you're trolling. What's pathetic is how badly you're contradicting yourself again. I thought you were a Libertarian policy guy? Is it turning out you're just a wonk with zero critical thinking skills?

Go to the 4 min 50 second mark of that video you posted. Friedman is clearly talking about FLOATING currencies, which I support and have stated numerous times throughout this thread. The video you posted supports me, not you. Way to contradict yourself!

HENCE the title, "Free trade cannot co-exist with currency manipulation," because countries that peg or purposely devalue their currencies in order to gain a competitive trade advantage are effectively enslaving their citizens and impoverishing ours.

I am arguing for tariffs as a corrective measure against any country that imposes heavy currency manipulation, and apparently you're arguing against me yet you've presented zero arguments thus far.

[FebGun]

Jumping late on this bandwagon ...

Labor cost is just one of the reasons why companies are leaving US. I read that total cost of compliance for US companies something between 1 - 2 trillion dollars annually. It includes general labor laws, child labor laws, environmental laws, antidiscrimination laws, then goes all "acts", presidential decrees on min wages, overtime, etc ..., and many others like mandatory 12-year education that keeps children from starting working careers and supplying chip labor and etc, and etc...

(03-04-2016 11:12 PM)Samseau Wrote:  

Libertarian and classical economists got it wrong on free trade. They did not consider how international markets could be manipulated to turn groups of people into slaves for the sole benefit of an elite few. I don't know many libertarians who support slavery, so usually when I point out the above analysis they quickly change their opinion on how free trade is supposed to operate.

And if China wants to provide goods at slave labor price for me as it does (ME, not "elite few") then I'm more then pleased to consume them.

Impressive and very detailed charts on trade deficit.
So what? And what is a trade balance between California and Alabama? Do we even care!?

China invest this money back into Wall Street. Of course if one day China would refuse to take dollars as a payment we would be in a big trouble. But not because we don't have tariff, but because we killed our economy by excessive regulations and now we totally dependent on China.

And one more thing on "free trade".
NAFTA, TPP , etc... these agreements are something around 2200 or 2700 pages each. 3000 pages of regulations have nothing to do with freedom. And if that not enough then TPP is absolutely secret!! Only federal government and corporations know details. To sum it up - state creates venue for well-connected businesses to move its business abroad while keeping smaller competitor at bay. And we have bipartisan support on that.

[FebGun]

And by the way, where all this money came from for our laptops, iPhones and other gadgets?
They got freed up, buy exploding of free trade with China; and suddenly you have to pay for your shoes only a half of that you have paid before. And that was another thing that stimulated dot com and technological boom of 90th.

[heavy]

Wowzer, I'd rep you again if I could. That OP blew my mind. Good stuff.

I have a question that relates at least indirectly...and I know it's more of a detail question.

I thought of the bail outs when I read about the First World elites and First World regulars. I always think people hate on the bail outs for funneling $ to wall street and banks, while disregarding how they saved pension plans (labor unions, teacher unions, etc).

We have all these terrible pension plans whereby a person works 25 years, then for the next 40 years we pay them 65%+ of their top salary. It's like we're handing them well over a million dollars as retirement...and it's simply not sustainable...unless we bail out the banks.

Thoughts? I'm not knowledgeable about this stuff.

[Samseau]

(05-19-2016 10:59 PM)FebGun Wrote:  

Jumping late on this bandwagon ...

Labor cost is just one of the reasons why companies are leaving US. I read that total cost of compliance for US companies something between 1 - 2 trillion dollars annually. It includes general labor laws, child labor laws, environmental laws, antidiscrimination laws, then goes all "acts", presidential decrees on min wages, overtime, etc ..., and many others like mandatory 12-year education that keeps children from starting working careers and supplying chip labor and etc, and etc...

(03-04-2016 11:12 PM)Samseau Wrote:  

Libertarian and classical economists got it wrong on free trade. They did not consider how international markets could be manipulated to turn groups of people into slaves for the sole benefit of an elite few. I don't know many libertarians who support slavery, so usually when I point out the above analysis they quickly change their opinion on how free trade is supposed to operate.

And if China wants to provide goods at slave labor price for me as it does (ME, not "elite few") then I'm more then pleased to consume them.

So you're cool with slavery? Too bad the rest of the Western world isn't. Maybe you should become a Muslim? They still sell and buy slaves, you'd have a blast.

Quote:

Impressive and very detailed charts on trade deficit.
So what? And what is a trade balance between California and Alabama? Do we even care!?

Doesn't matter because they are equal trading partners and have very similar rules and regulations applied to them.

[FebGun]

Samseau,

First of all, we are not talking about slavery. We are talking about like-slavery.
When guy signs up for a sweatshop he makes a decision and he chooses what is the best for him. And even if he forced under threat of death or starvation the next moment after agreement signed he feels happier than a moment before because he would not have signed otherwise.
When father sends his child to the sweatshop he does it in a best interest of his son. And don't tell me that foreign government loves this child more than his father. His father is giving future while foreign antislavery activists are trying to starve his son by their actions.

I have a friend in NY who complied to me that he payed last year 52% tax total. He included all sale taxes, tolls, hidden ones like when you buy gas, etc... And it suddenly struck me that medieval European serf worked 4 days a week for feudal and 3 days a week for himself, which is 47% tax, almost like my friend. But slavery is 100% tax. And he considers himself free. So I wouldn't agree with you that masses that populates Western World don't like slavery. They like it and this is a problem!

Rousseau, looking back into history noted that somehow the freest people lived back then when slavery was around; then he wrote something like ... "Is it possible that absolute freedom requires absolute non-freedom? Perhaps yes. Extremes meet each other."
When you hinted that I'm pro-slavery you missed very little. I'm not pro-slavery, I'm pro-freedom. These two conditions somehow exist very close. I hate equality. The same way like you cannot make everybody equally reach (only equally pure) you cannot make everybody equally free, but only equally non-free. "Democracy is a serfdom in installments". Little by little, law by law. "Emancipation of slaves was not act of grace, but act of pusillanimity".

Consider this Red Pill as a donation to this forum.

[ovloV]

I'm going to have to respectfully throw my challenge flag on this thread: a lot of the information is wrong both in terms of numbers and conclusion drawn from the data.

Quote:

Third-world countries such as China, India, etc, have a set of laws in place to keep their population enslaved while they work to produce crap for First-world countries.

So the thesis here is that Chinese are slaves who can never save money.

Quote:

China, for example, has a currency peg set at roughly 6:1. So no matter how much a Chinese worker saves, his dollars of value are always worth six less than American dollars. So if America prints 3 trillion dollars, that means his base currency supply has also necessarily devalued by 18 trillion.

So while this sounds good, this really isn't how it works. Both countries have independent monetary policies. For this to be true, the inflation rate in China would have to be the inflation rate in the US multiplied by 6. Or you could argue that because the monetary base is already 6 times larger, the inflation rates would be the same. Either way, it's incorrect. The inflation rate of America is 1.1% and the inflation rate in China is 2.65%. In fact, there is no conclusive evidence of a causative relationship between either country's inflation rates. Going back to when the RMB was first pegged to the dollar in 1994, the correlation coefficient between the two has bounced from as low as 24% to as high as 57%. Things get even weirder when you consider that the M1 money supply of the two countries has a negative correlation. So more M1 in US means less M1 in China. What correlation thee is can't even be determined to be causative. There are hundreds if not thousands of factors that will influence the inflation rate and money supply, but the currency peg is not a significant contributor. Source from FED

Quote:

At the bottom of the economic totem pole are Third-worlder's savings which are constantly devalued and rendered into shit, which means they must continue working to pay for a cost of living they can never keep up with.

The end game is that the Chinese man works until he dies because he will never accumulate savings, and most First-world citizens go without real work until he dies because his country men have few high-paying jobs and cannot accumulate capital to start new businesses. The only ones who make it are those who win approval from the ever selective financial "industry," which is nothing more than slave-racketeering.

This is a very easy to answer question. Do savings rates keep up with inflation rates in China? Well we already know that inflation rates are below 3%. A quick search would reveal Chinese savings rates to be much, much more, with 50% of all GDP going into the bank, with about 22% being household savings.

Let's play devil's advocate for a bit though. Let's try to find some data on how much of that savings is coming from super rich Chinese families. This paper] has savings rates by quantile, with the bottom 25% saving about 7% of their income, the second quantile saving about 18%, the third quantile saving about 25%, and the fourth quantile saving over 35%. So every income group in China is saving an awful lot of money. It's also important to keep in mind that during this entire time the real household income of China is increasing. So the amount they save has been steadily rising, and the income adjusted for inflation has also been steadily rising. These people are not slaves who can't save. These people are saving machines. Probably helps to explain why China has one of the earliest retirement ages.

Quote:

For example, in China it is illegal to take money out of the country. This is why bitcoin and gold are so popular in China, because it is a way for the average Chinaman to escape the capital controls and brutal currency peg. By changing his Chinese dollars into bitcoins he can avoid the steady devaluation of his money. This is also the reason why the Chinese elites buy up tons of American property in major cities, because these places are priced in American dollars which are worth 6 times as much as Chinese dollars, via the peg.

His money is not devaluing. It's appreciating, both domestically and abroad. One USD is worth 6 RMB on for Forex market. But most Chinese people are not buying and selling on the Forex Market. Price parity comes into play. But 1 dollar and 6 RMB buy very different things. A bottle of water in US is about .99 USD. A bottle of water in China is not 5.84 RMB, it's about 1 RMB. Price parity. His income is rising faster than inflation, with enough left over to bank nearly one quarter of it. Internationally, the RMB has appreciated against most major currencies in the last few years, this is why tourism is China has been booming: they can afford to travel.

So that should do it for the notion that Chinese people are slaves doomed to toil in sweatshops forever. If you want to hear some anecdotal evidence, NPR had an interesting bit on some women in factories, pretty sure it was just called "Factory Girls." These sweatshop jobs can be very lucrative.

There's another issue I'd like to address while I'm at it. If China were to let the RMB float, their labor would become less competitive. Those jobs would leave China, but in the absence of tariffs or regulations, they wouldn't go back to America. They would go somewhere else, probably Vietnam or Cambodia or Africa, where its free floating currency would appreciate until jobs went elsewhere. It's not as if China and the RMB is the only thing keeping jobs from US workers. It's comprative advantage.

Now onto the graphs and numbers used to justify the thesis.

The first thing I noticed was the trade deficit. Yes there is a trade deficit. This has little to do with the notion that labor is slavery. Companies will go to where labor is cheapest. This will change after one region accumulates enough investment. The US will always run a trade deficit, all that will change is who is running the surplus.

GDP PER CAPITA
Now we get to the GDP per capita graphs. I have a few things to say about these. The first is that the graph for China GPD per capita is wrong. Those numbers are incorrect. The source listed on that website is the World Bank. The World Bank has different numbers. The actual GDP per capita of China is about 7,500, or double what the graph shows. This is really weird because every other country I looked up was in agreement with the World Bank.

This brings me to my next point, GDP per capita is a simple ratio of total GDP divided by total population. That's it. Try it with America: total GDP of 19.3 trillion divided by a population of 350 million. 19,300,000,000,000/350,000,000 = 55,000. What our GDP per capita is. For China to have a GDP per capita of 3,500 and a total GDP of 10 trillion, it would need to have a population of 2.9 trillion people, or almost double what it has now.

This is important because the conclusions that OP draws about Chinese incomes can't be drawn from the evidence presented.

Quote:

China, in spite of having one of the largest economies in the world, have some of the poorest workers in the world. Their GDP has increased roughly by a factor of 5, yet their workers have seen their GDP per capita increase only roughly by a factor of 2. This is exactly what you'd expect with a currency peg, since the only people who escape the rampant inflation in China are the Communist elites and Industrial elites, who quickly spend their profits in other countries, buying up real estate, gold, or whatever else tangible goods they can get their hands on, while the Chinese worker watches his savings inflate away every year.

No, this is flat out wrong. If GDP per capita doubled, and total GDP quintupled, then the only conclusion that can be drawn is that population increased by 2.5 times. If you want to show that some people in China are poor and some are super rich, you need to look at the Gini coefficient.

TL;DR: The thesis presented is not supported by empirical data and the evidence given doesn't lead the conclusion stated.

[Samseau]

(05-20-2016 01:52 PM)FebGun Wrote:  

Samseau,

First of all, we are not talking about slavery. We are talking about like-slavery.
When guy signs up for a sweatshop he makes a decision and he chooses what is the best for him. And even if he forced under threat of death or starvation the next moment after agreement signed he feels happier than a moment before because he would not have signed otherwise.
When father sends his child to the sweatshop he does it in a best interest of his son. And don't tell me that foreign government loves this child more than his father. His father is giving future while foreign antislavery activists are trying to starve his son by their actions.

I have a friend in NY who complied to me that he payed last year 52% tax total. He included all sale taxes, tolls, hidden ones like when you buy gas, etc... And it suddenly struck me that medieval European serf worked 4 days a week for feudal and 3 days a week for himself, which is 47% tax, almost like my friend. But slavery is 100% tax. And he considers himself free. So I wouldn't agree with you that masses that populates Western World don't like slavery. They like it and this is a problem!

Rousseau, looking back into history noted that somehow the freest people lived back then when slavery was around; then he wrote something like ... "Is it possible that absolute freedom requires absolute non-freedom? Perhaps yes. Extremes meet each other."
When you hinted that I'm pro-slavery you missed very little. I'm not pro-slavery, I'm pro-freedom. These two conditions somehow exist very close. I hate equality. The same way like you cannot make everybody equally reach (only equally pure) you cannot make everybody equally free, but only equally non-free. "Democracy is a serfdom in installments". Little by little, law by law. "Emancipation of slaves was not act of grace, but act of pusillanimity".

Consider this Red Pill as a donation to this forum.

This isn't even red pill, this is the Jew pill worship of money. Here's red-pill. Buy a gun, kill the slave owner, and take his shit.

If you're going to justify something that is inherently immoral, like slavery, then it is impossible to defend something like property rights with moral arguments and therefore there is nothing stopping anyone from killing and stealing someone else's stuff. Slavery is a natural progression into a state of war.

[Samseau]

Multiple fails in logic detected.

(05-20-2016 02:57 PM)ovloV Wrote:  

I'm going to have to respectfully throw my challenge flag on this thread: a lot of the information is wrong both in terms of numbers and conclusion drawn from the data.

Quote:

Third-world countries such as China, India, etc, have a set of laws in place to keep their population enslaved while they work to produce crap for First-world countries.

So the thesis here is that Chinese are slaves who can never save money.

Or save very little.

Quote:

Quote:

China, for example, has a currency peg set at roughly 6:1. So no matter how much a Chinese worker saves, his dollars of value are always worth six less than American dollars. So if America prints 3 trillion dollars, that means his base currency supply has also necessarily devalued by 18 trillion.

So while this sounds good, this really isn't how it works. Both countries have independent monetary policies. For this to be true, the inflation rate in China would have to be the inflation rate in the US multiplied by 6.

False. Not all dollars will be spent in China.

Quote:

Or you could argue that because the monetary base is already 6 times larger, the inflation rates would be the same. Either way, it's incorrect. The inflation rate of America is 1.1% and the inflation rate in China is 2.65%. In fact, there is no conclusive evidence of a causative relationship between either country's inflation rates. Going back to when the RMB was first pegged to the dollar in 1994, the correlation coefficient between the two has bounced from as low as 24% to as high as 57%.

So what? China manipulates its economy like crazy in tons of ways.

Quote:

Things get even weirder when you consider that the M1 money supply of the two countries has a negative correlation. So more M1 in US means less M1 in China. What correlation thee is can't even be determined to be causative. There are hundreds if not thousands of factors that will influence the inflation rate and money supply, but the currency peg is not a significant contributor. Source from FED

M1? No analysis is going to be accurate unless it uses M2 at least, M3 also acceptable but harder to measure. M1 supply can rapidly shrink as money is sucked up into long-term investments such as infrastructure or mutual funds, so just because China's M1 supply decreased does not mean they are not experiencing a huge influx of cash as a result of their peg.

Quote:

Quote:

At the bottom of the economic totem pole are Third-worlder's savings which are constantly devalued and rendered into shit, which means they must continue working to pay for a cost of living they can never keep up with.

The end game is that the Chinese man works until he dies because he will never accumulate savings, and most First-world citizens go without real work until he dies because his country men have few high-paying jobs and cannot accumulate capital to start new businesses. The only ones who make it are those who win approval from the ever selective financial "industry," which is nothing more than slave-racketeering.

This is a very easy to answer question. Do savings rates keep up with inflation rates in China? Well we already know that inflation rates are below 3%. A quick search would reveal Chinese savings rates to be much, much more, with 50% of all GDP going into the bank, with about 22% being household savings.

You don't know what the inflation rates are. You only know what a Communist government reports, which is laughable propaganda. Likewise with the savings.

Quote:

Let's play devil's advocate for a bit though. Let's try to find some data on how much of that savings is coming from super rich Chinese families. This paper] has savings rates by quantile, with the bottom 25% saving about 7% of their income, the second quantile saving about 18%, the third quantile saving about 25%, and the fourth quantile saving over 35%. So every income group in China is saving an awful lot of money. It's also important to keep in mind that during this entire time the real household income of China is increasing. So the amount they save has been steadily rising, and the income adjusted for inflation has also been steadily rising. These people are not slaves who can't save. These people are saving machines. Probably helps to explain why China has one of the earliest retirement ages.

Even if this report is accurate, which is most certainly not, it still shows that the rich are banking the majority of the savings, which incidentally, are being devalued at a breakneck pace due to the currency peg on the dollar.

Quote:

Quote:

For example, in China it is illegal to take money out of the country. This is why bitcoin and gold are so popular in China, because it is a way for the average Chinaman to escape the capital controls and brutal currency peg. By changing his Chinese dollars into bitcoins he can avoid the steady devaluation of his money. This is also the reason why the Chinese elites buy up tons of American property in major cities, because these places are priced in American dollars which are worth 6 times as much as Chinese dollars, via the peg.

His money is not devaluing. It's appreciating, both domestically and abroad. One USD is worth 6 RMB on for Forex market. But most Chinese people are not buying and selling on the Forex Market. Price parity comes into play. But 1 dollar and 6 RMB buy very different things. A bottle of water in US is about .99 USD. A bottle of water in China is not 5.84 RMB, it's about 1 RMB. Price parity. His income is rising faster than inflation, with enough left over to bank nearly one quarter of it. Internationally, the RMB has appreciated against most major currencies in the last few years, this is why tourism is China has been booming: they can afford to travel.

The bottle of water shows that a Chinaman should sell his water in America because he makes six times as much, and that the only way he can compete with his Chinese competitors is to sell to America and keep his head above the devaluation scheme.

Unfortionately, only the rich well-connected Chinese are allowed to sell abroad or take their money abroad, which means the regular Chinaman has only accumulated peanuts in savings after working 35+ years.

Meanwhile, the retirement rate in China is so low because they destroy workers there; those who do not kill themselves eventually burn out and try to live as cheaply as possible for the rest of their lives after having destroyed their back, eyes, fingers, etc. in terrible factory conditions.

Also it's just the mega rich Chinese who travel, half of them have Communist party ties.

Quote:

Quote:

So that should do it for the notion that Chinese people are slaves doomed to toil in sweatshops forever. If you want to hear some anecdotal evidence, NPR had an interesting bit on some women in factories, pretty sure it was just called "Factory Girls." These sweatshop jobs can be very lucrative.

Lol, NPR's being the mouthpiece for Chinese propaganda is no different than liberal's back in the 60's and 70's talking about how great the Soviet Union was. You haven't proven anything and your analysis above is dogged by many logical flaws and fallacies.

Quote:

[quote]
There's another issue I'd like to address while I'm at it. If China were to let the RMB float, their labor would become less competitive. Those jobs would leave China, but in the absence of tariffs or regulations, they wouldn't go back to America. They would go somewhere else, probably Vietnam or Cambodia or Africa, where its free floating currency would appreciate until jobs went elsewhere. It's not as if China and the RMB is the only thing keeping jobs from US workers. It's comprative advantage.

Exactly, which is why I titled this thread, "Free Trade Cannot Co-Exist With Currency Manipulators," so if China were to stop the devaluation then America must lift tariffs on them and put tariffs on anyone else who engages in the practice.

Quote:

Now onto the graphs and numbers used to justify the thesis.

The first thing I noticed was the trade deficit. Yes there is a trade deficit. This has little to do with the notion that labor is slavery. Companies will go to where labor is cheapest. This will change after one region accumulates enough investment. The US will always run a trade deficit, all that will change is who is running the surplus.

False. The US's trade deficit could easily be lessened or removed with enough tariffs. Note that I do not advocate this.

Quote:

GDP PER CAPITA
Now we get to the GDP per capita graphs. I have a few things to say about these. The first is that the graph for China GPD per capita is wrong. Those numbers are incorrect. The source listed on that website is the World Bank. The World Bank has different numbers. The actual GDP per capita of China is about 7,500, or double what the graph shows. This is really weird because every other country I looked up was in agreement with the World Bank.

This brings me to my next point, GDP per capita is a simple ratio of total GDP divided by total population. That's it. Try it with America: total GDP of 19.3 trillion divided by a population of 350 million. 19,300,000,000,000/350,000,000 = 55,000. What our GDP per capita is. For China to have a GDP per capita of 3,500 and a total GDP of 10 trillion, it would need to have a population of 2.9 trillion people, or almost double what it has now.

Where are you getting your numbers from? Link please. Why should we dispute the World Bank's figures?

Quote:

This is important because the conclusions that OP draws about Chinese incomes can't be drawn from the evidence presented.

Quote:

China, in spite of having one of the largest economies in the world, have some of the poorest workers in the world. Their GDP has increased roughly by a factor of 5, yet their workers have seen their GDP per capita increase only roughly by a factor of 2. This is exactly what you'd expect with a currency peg, since the only people who escape the rampant inflation in China are the Communist elites and Industrial elites, who quickly spend their profits in other countries, buying up real estate, gold, or whatever else tangible goods they can get their hands on, while the Chinese worker watches his savings inflate away every year.

No, this is flat out wrong. If GDP per capita doubled, and total GDP quintupled, then the only conclusion that can be drawn is that population increased by 2.5 times. If you want to show that some people in China are poor and some are super rich, you need to look at the Gini coefficient.

I said, "roughly". The actual increases are still proportional; the GDP has increased by a factor of 3.79, while the GDP per capita has increased by a factor of 1.98 as the country's population went up between 2006 and 2014 by approximately 100 million.

https://www.quandl.com/data/WORLDBANK/CH...tion-total

You are right though, the Gini coefficient is a much better measure to use to describe wealth inequality. GDP per capita isn't as useful because population increases can skew the numbers.

According to the economist, both China and USA are near the top of the list by China beats the USA by over 10%:

http://www.economist.com/news/china/2157...out-bottle



Unfortunately this is 2013 old. Also I bet America's Gini Coefficient was much lower before the 2008 bailouts.

Regardless, the trade situation I've described that benefits America and China's elites perfectly matches the Gini Coefficients.

[ovloV]

Quote:

Quote:

China, for example, has a currency peg set at roughly 6:1. So no matter how much a Chinese worker saves, his dollars of value are always worth six less than American dollars. So if America prints 3 trillion dollars, that means his base currency supply has also necessarily devalued by 18 trillion.

Quote:

So while this sounds good, this really isn't how it works. Both countries have independent monetary policies. For this to be true, the inflation rate in China would have to be the inflation rate in the US multiplied by 6.

False. Not all dollars will be spent in China.

How is this relevant? You made the claim that devaluing the US monetary base by some amount X would devalue the Chinese base by X*6. If that devaluation is not happening by inflation, where does it come from? How else can currency just lose a bunch of value and prices stay the same? In what index will the devaluation be reflected in if not inflation, which has a weak link at best to US inflation? This makes no sense. A currency can't just devalue by 18 trillion dollars and not show it anywhere.

Quote:

]quote]

Quote:

Things get even weirder when you consider that the M1 money supply of the two countries has a negative correlation. So more M1 in US means less M1 in China. What correlation thee is can't even be determined to be causative. There are hundreds if not thousands of factors that will influence the inflation rate and money supply, but the currency peg is not a significant contributor. Source from FED[/unquote]

M1? No analysis is going to be accurate unless it uses M2 at least, M3 also acceptable but harder to measure. M1 supply can rapidly shrink as money is sucked up into long-term investments such as infrastructure or mutual funds, so just because China's M1 supply decreased does not mean they are not experiencing a huge influx of cash as a result of their peg.[/unquote]
[/unquote]

Considering M2 includes M1, there's no reason for the same relationship to exist, but I thought I could find someone that proves that as well, and I did here

Quote:

You don't know what the inflation rates are. You only know what a Communist government reports, which is laughable propaganda. Likewise with the savings.

Now this is just intellectually lazy. If you disagree with my numbers then find some of your own. Unless you alone are able to see this charade and the other hundreds of millions of people who do this for a living are just oblivious. These are the accepted numbers. Not that the inflation rates matter to you because "dollars are spent elsewhere."

Quote:

Even if this report is accurate, which is most certainly not, it still shows that the rich are banking the majority of the savings, which incidentally, are being devalued at a breakneck pace due to the currency peg on the dollar.[/unquote]

You can't jsut dismiss evidence you don't like with "it must be wrong." Because this and this and http://aalto-econ.fi/yaopan/files/Yao%20sav.pdf. But what I can't find anywhere is the guy saying that these poor people can't save anything because there currency is devalued too rapidly but not from inflation. That guy doesn't exist.

[quote]The bottle of water shows that a Chinaman should sell his water in America because he makes six times as much, and that the only way he can compete with his Chinese competitors is to sell to America and keep his head above the devaluation scheme.

Unfortionately, only the rich well-connected Chinese are allowed to sell abroad or take their money abroad, which means the regular Chinaman has only accumulated peanuts in savings after working 35+ years.

Meanwhile, the retirement rate in China is so low because they destroy workers there; those who do not kill themselves eventually burn out and try to live as cheaply as possible for the rest of their lives after having destroyed their back, eyes, fingers, etc. in terrible factory conditions.

Also it's just the mega rich Chinese who travel, half of them have Communist party ties.

All the water bottle shows is that PPP exists, and you don't seem to understand what that means.

Quote:

[quote]GDP PER CAPITA
Now we get to the GDP per capita graphs. I have a few things to say about these. The first is that the graph for China GPD per capita is wrong. Those numbers are incorrect. The source listed on that website is the World Bank. The World Bank has different numbers. The actual GDP per capita of China is about 7,500, or double what the graph shows. This is really weird because every other country I looked up was in agreement with the World Bank.

This brings me to my next point, GDP per capita is a simple ratio of total GDP divided by total population. That's it. Try it with America: total GDP of 19.3 trillion divided by a population of 350 million. 19,300,000,000,000/350,000,000 = 55,000. What our GDP per capita is. For China to have a GDP per capita of 3,500 and a total GDP of 10 trillion, it would need to have a population of 2.9 trillion people, or almost double what it has now.[/unquote]

Where are you getting your numbers from? Link please. Why should we dispute the World Bank's figures?[/unquote]

I should have made this more clear. I'm not disputing the World Bank figures. The World Bank figures disagree with the ones you initially posted. The World Bank lists its figures http://data.worldbank.org/indicator/NY.GDP.PCAP.CD. The numbers in the original graph make no mathematical sense.

[quote][quote][quote]This is important because the conclusions that OP draws about Chinese incomes can't be drawn from the evidence presented.

China, in spite of having one of the largest economies in the world, have some of the poorest workers in the world. Their GDP has increased roughly by a factor of 5, yet their workers have seen their GDP per capita increase only roughly by a factor of 2. This is exactly what you'd expect with a currency peg, since the only people who escape the rampant inflation in China are the Communist elites and Industrial elites, who quickly spend their profits in other countries, buying up real estate, gold, or whatever else tangible goods they can get their hands on, while the Chinese worker watches his savings inflate away every year.

No, this is flat out wrong. If GDP per capita doubled, and total GDP quintupled, then the only conclusion that can be drawn is that population increased by 2.5 times. If you want to show that some people in China are poor and some are super rich, you need to look at the Gini coefficient.

I said, "roughly". The actual increases are still proportional; the GDP has increased by a factor of 3.79, while the GDP per capita has increased by a factor of 1.98 as the country's population went up between 2006 and 2014 by approximately 100 million.

It doesn't matter how you say it. THERE IS NO OTHER WAY TO CALCULATE GDP PER CAPITA. Total GDP/Total population. This tells you NOTHING about income breakdown within a country. A hypothetical country with a population of 10 and a GDP of 100 has a GDP per capita of 10. This is the same if 1 person owns all 100 dollars, or if everyone truly has 10 dollars. No information regarding the wage conditions of Chinese labor can be drawn from GDP per capita. It is not possible using the definition of GDP per capita.

Quote:

You are right though, the Gini coefficient is a much better measure to use to describe wealth inequality. GDP per capita isn't as useful because population increases can skew the numbers.

According to the economist, both China and USA are near the top of the list by China beats the USA by over 10%:

Regardless, the trade situation I've described that benefits America and China's elites perfectly matches the Gini Coefficients.

Except this is not how the Gini coefficient is interpreted. A Gini coefficient is a relative measure of inequality. All that can be gained from looking at the Gini coefficient is that the rich are getting richer faster the poor are getting richer. It does not mean that the poor are not getting richer, only that they are getting richer at a slower pace than the rich are. If you have 15 dollars, and I have 10 dollars, and next year you have 20 dollars and I have 12 dollars, our Gini coefficient would increase, despite the fact that I am still better off than I was a year ago.

But all of this is meaningless, because you have yet to empirically show the constant devaluation of the RMB. Just one index that shows this and you can stop all doubters, otherwise it seems that empirically you are wrong on almost every count.

[ovloV]

I can't edit now, but I seriously fucekd up that formatting. Still figuring out how to quote things without muffing it all up.

[FebGun]

(05-22-2016 11:24 AM)Samseau Wrote:  

this is the Jew pill worship of money.

Ban money like Pol Pot did. Be moral.

[jayko]

@porscheguy

No, hk doesn't have their own army. If you insist, I m afraid that army would be called as PLA.

[RexImperator]

A brief lecture on free trade vs. economic nationalism. I found it worthwhile:

It's true that Trump's opponents and the media promote the idea than "globalization just happens" as if it isn't a choice and the result of a specific set of policies.

The Social Contract Press looks interesting. Their books are like a collection of Trump talking points. They were calling for a ban on Muslim immigration to the US back in 2011.

[Liberty Sea]

Since Samseau recently brought up slave communist labor in another thread, I feel that it's high time we update this thread.

(07-03-2017 12:55 PM)Samseau Wrote:  

Quote:

Enterprises keep pouring into China mostly due to objective economic laws slave communist labor. It’s most profitable to open your factories there. Not even globalists can reverse that.

Fixed.

As for the globalists controlling China, I am very skeptical. Zel said the globalists would never let Trump win. Zel overestimates what they are capable of. I think the globalists were trying to use China but ultimately it's a plan that backfired because of the reasons Liberty Sea has pointed out. The Chinese are just as ethically racist as most Jews. There's no way they'll fall victim to subversion.

To be sure, Samseau is a smart guy who is often on point. But I have to agree with ovlov here.

First,

Quote:

Where are you getting your numbers from? Link please. Why should we dispute the World Bank's figures?

He is not disputing the World Bank's figures. He's saying the your graph misreported the World Bank's figure.

Here is the direct source: http://data.worldbank.org/indicator/NY.G...cations=CN

The TradingEconomics graph has China's 2007 GDP per capita at 3487. The WB's figure is 2695. The TE graph has China's 2015 GDP per capita at 6497. The WB's figure is 8069. According to the WB's figures, China's GDP per capita increased by a factor of 3 during this time span. This correspond to China's GDP growth (11065/3552 roughly equals 3, adjusted with population growth).

This is because as Ovlov said, there is no other way of calculating GDP per capita.



2. Chinese workers' wages have been steadily raising, way faster than inflation. Life standard have improved, and the middle class is growing.

https://www.bloomberg.com/news/articles/...-you-think
http://money.cnn.com/2016/03/17/news/eco...ductivity/

Quote:

These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics.
That's because wages in China have risen much faster than increases in productivity. Coupled with a strengthening yuan, Chinese labor costs have grown dramatically. Meanwhile, huge productivity improvements in the U.S. have helped keep labor costs down.
The bottom line: Manufacturing in China is no longer a surefire way to save on the cost of labor.

https://www.economist.com/news/briefing/...ening-grip





So low-end manufacturers have been trying to relocate their factories and find cheap labor else, like in SEA, eg. Vietnam.

Quote:

China doesn’t release data on factory closings or relocations. But according to an analysis by researcher Justina Yung of Hong Kong Polytechnic University for the Federation of Hong Kong Industries trade group, the number of factories owned by Hong Kong companies in the Pearl River Delta near Hong Kong fell by a third to 32,000 in 2013 from a 2006 peak. Many of those that left moved to lower-wage countries.

Labor costs in China have grown faster than consumer inflation for years, according to consultancy BMI Research, and are currently nearly four times those in Bangladesh, Laos, Cambodia and Myanmar.

Some textile and clothing manufacturers see advantages in Vietnam as well. “Moving to Vietnam is a trend,” says Wang Wei, general manager of Guangzhou Weihong Footwear Industrial Co., which established its first factory in 2013 in the southeast Vietnamese town of Thuan An to supply shoe makers Nike Inc., Adidas AG and Puma SE. Weihong now plans to build a second footwear factory and shift several textile factories to Vietnam from China.

Note that, it's only low-end manufacturing like textile finds advantage in Vietnam. Mid- to high-end manufacturing still finds advantage in China due to the quality of workers there. Some factories moved to Vietnam and then moved back to China because Vietnamese workers can't deliver the quality needed yet. I know this very well living in Vietnam.


Everyone who has been to China should know that the life of the people there have vastly improved every five years they come visit it. The growth is not fake. You can ask our forum's Chinese expats, or go to China to see it yourself.

In the word of one of the most prominent Chinese expat here:

(06-28-2017 09:21 AM)Fortis Wrote:  

I was looking the other day at all the gym girls in my gym.

But seriously, asses are becoming a thing in China since you have a burgeoning leisure class and women who are seriously so rich they have nothing to do all do other than hit the gym.

Betcha all those cars aren't driven by CPC members' relatives only.

There are abut 133 million of Chinese tourists each years, spending lavishly.
McKinsey projection:
http://www.mckinsey.com/industries/retai...ddle-class



This is reflected in satisfaction rate as well (PEW survey)






3. About Bitcoins, let me quote a Bitcoin expert here:

https://www.quora.com/Why-are-the-Chines...eph-Wang-9

Quote:

Question: Why are the Chinese buying so much bitcoins?

Answer: It really depends.

First of all, it’s not just a matter of buying bitcoin. China is the largest miner of bitcoin. This happened because of mix of factors such as the fact that you have a huge electronics industry in Shenzhen, as well as highly subsidized power. Once you produce bitcoin in large numbers then you need a huge industry to process it.

Second, a lot of it has to do just with the fact that there are so many Chinese people. Bitcoin is a very, very minor part of the Chinese economy, and the fraction of Chinese that have anything to do with bitcoin is small. However, a small fraction of a billion people and a multi-trillion dollar economy is huge.

The Chinese government has been tolerant of crazy investment stuff, because if you lose money in bitcoin, it’s not the government’s problem. Also bitcoin isn’t nearly large enough to bring down the Chinese economy (like for example P2P lending) so they haven’t put a huge amount of regulation on it.

Third, the reason really changes from month to month. Earlier in the year, there was a spike in bitcoin prices as people were trying to find ways of moving money out of China. That disappeared, and right now the big spike was because ethereum was hot, and so there was a herd mentality.

The cool thing is that things really change from week to week or even from day to day. For example, after the international banks closed off settlement between different bank accounts, there was a mad scramble for alternative settlement routes which meant that a flood of bitcoin started to move through HK.

Also one reason that bitcoin *isn’t* used is to hide money from the Chinese government. It turns out that bitcoin is extremely traceable, so if you move money with bitcoin, the Chinese government can pretty easily find you. The fact that it’s really hard to use bitcoin for corrupt purposes is why the Chinese government has been encouraging its use.

4. China still holds a production cost advantage over most countries because low labor cost is not its sole advantages. It also has:

a. High quality labor. Millions of well trained industrial workers.

b. World-class infrastructure/excellent logistics. If you want to set up factories, first of all you need good transportation system and reliable utility supply, which China has.

c. A complete supply chain. China is a huge country, it can manufacture all the components of any product, and do so more efficiently than other countries.

d. Economy of scale. The larger the manufacturing industry, the lower the production cost.

e. Management experience. You can get business/finance experience from HK, Taiwan, and overseas returnees. Which

f. Pro-business government officials. Chinese officials see themselves as business partners, and even the most corrupt officials want your business to be profitable and successful, because when you make money, they make money.

g. Low regulation. Developed countries like the US have more regulations regarding worker age, working conditions, etc. which make production more costly compared to China.

...


5. Products of all sorts of quality are produced in China. If the consumer buy a Madein China $50 dollar heater and it breaks, it's their responsibility for not choosing to buy the $150 heater which is also Made in China.

6. Most jobs lost in the US are due to improved production technology/automation, not moving jobs oversea.

http://money.cnn.com/2017/01/30/news/eco...utomation/

Quote:

One study by two Ball State University professors found that between 2000 and 2010, about 87% of the manufacturing job losses stemmed from factories becoming more efficient. The chief driver of more efficiency in factories: automation and better technology. The other 13% of job losses were due to trade.

Based on the data available, I conclude that the Chinese government isn't dooming its people to perpetual wage slavery. In fact, income raise is necessary for China to move to a consumer-driven economy. The Chinese government knows this and it's doing this. It's trying to move up the value chain as I have detailed here and here.



=============




*Regarding quibble about the Chinese government’s data, I’ll just quote Arthur Kroeber from his book “China’s Economy – What Everyone Needs to Know” here:

Quote:

Many serious analysts do believe that the government tends to smooth out the quarterly GDP growth numbers, underreporting growth when it is very hot and nudging the figures upward when it is cool. Most other data problems and inconsistencies can be explained by ordinary analytic econometric work, without resort to conspiracy theories about deliberate falsification. Those interested in making sensible use of Chinese data should consult Tom Orlik’s excellent Understanding China’s Economic Indicators (FT Press, 2012).

The falsification theory also fails a simple logical test. If the gov- ernment publishes false data, it must either rely on this false data to make economic policy, or it must keep a secret set of true data. If it uses false data, economic policy will quickly run aground, as it did during the Great Leap Forward of the 1950s, when reliance on bogus agricultural production numbers led within a couple of years to a catastrophic famine that killed tens of millions of people. China’s sustained economic success since 1978 simply could not have occurred if the government had relied on faulty data.

This leaves the possibility that the government uses a secret set of true data to form policy, while feeding lies to the public. No evidence has ever been presented that such a secret data set exists. There are certainly a few data series that are not published but are reserved for the internal use of government officials. What is interesting is how boring these prove to be when occasionally they come to light through a leak— as, for instance, when a clas- sified unemployment figure was accidentally disclosed at a press conference. The figure was 5 percent, compared to the published “registered unemployment” figure of 4 percent. In any case, if the government really kept a full set of secret accounts, the fal- sity of the published data could be exposed by the same statistical tests used by forensic accountants to prove chicanery in corporate Appendix 265 balance sheets. These tests have been applied, and have failed to show any evidence of systemic falsification.

The more serious claim, made by several economists, is that China’s long- run growth rate has been systematically overstated, not because China sought to bamboozle the world but because its statisticians employed faulty techniques. The most recent version of this argument is by Harry X. Wu of The Conference Board, who heroically reconstructed China’s national accounts for the sixty- year period 1952– 2012 in order to arrive at a better understanding of long- term trends in productivity growth. Wu concluded that, thanks mainly to weaker than reported productivity gains, China’s average annual real GDP growth during the reform era (1978– 2012) was 7.2 percent, well below the official figure of 9.8 percent. 2

This is an interesting exercise, but it raises some conceptual prob- lems. If we assume that the size of the Chinese economy was accu- rately measured in 1978, then the lower growth rate compounded over thirty- four years implies that China’s economy in 2012 was less than half as big as the official data say it was. This is impossible, because the economy’s present size is roughly confirmed by a wealth of information, including the government’s own economic censuses, and indicators including exports, foreign exchange reserves and consumption of physical items such as automobiles, oil, steel, and cement that are independently verifiable and not subject to falsifica- tion. If, on the other hand, we assume that the economy’s reported size today is correct, then the lower growth rate compounded back thirty- four years implies that China’s economy was more than twice as big in 1978 as the government believed it to be. This is slightly more plausible than the first case, but not much. Alternatively, we can try to pick values for China’s 1978 and 2012 GDP that are not so obviously incredible, for instance that the economy was two- thirds bigger than reported in 1978 and one- quarter smaller in 2012 (in which case we need merely explain away $2 trillion— an India’s worth— of phantom output). Any way you slice it, it is quite hard to reconcile the arithmetic of these alternative growth calculations with observed reality.

To anyone who has spent much time in China since the 1980s, it is clear that (a) China has grown very rapidly for a long time; and (b) the speed and nature of that growth was roughly comparable to that of Japan, South Korea, and Taiwan, each of which uncontroversially 266 Appendix grew at 8 to 10 percent a year for about a quarter- century in the post– World War II era. The reluctance of some observers to accept that China achieved similar results to those of its neighbors, using essentially the same economic playbook, is odd. It probably reflects the belief that because China’s government is secretive, authori- tarian, and untrustworthy in many political matters, its economic data must also be untrustworthy. The feeling is understandable, but the conclusion is supported by neither logic nor the preponder- ance of evidence. A government so dependent on sustained eco- nomic growth for its legitimacy, and so keenly aware (thanks to its own recent history) of the disastrous consequences of relying on bad data, has a strong self- interest in maintaining statistics that are approximately right, at least with regard to trends, even if they do not meet the highest standards of modern statistical science. Like all economic data, China’s must be used with care; but they are usuable.

[RBerkley]

President Trump was warning Canada not to manipulate its currency, which may explain why Bank of Canada Governor Poloz turned 360 and insisted on a rate hike (which boosts the value of the $CAD).

I remember a few months ago when the CAD was at 72 cents and Poloz was bitching that it should be lower because of 'excess capacity'....Some FX traders were betting that the Loonie would have declined to at least 65 cents by Q4 2017, but Poloz made a 360, because of he left interest rates at 0.50% for the rest of the year, while the FED anticipates an increase from the current 1.25% to 1.50% in 2017, the Loonie will depreciate to 65 cents.

[Samseau]

Liberty Sea unfortunately math is not one of your strong suits,



This is a joke right? This exchanges out to about $8,000 a year. That's barely enough to get car insurance in some states. Minimum wage in America pays double of this.

Tariffs, please. They will crush China and the paper tiger will fold like origami.

[Liberty Sea]

(07-05-2017 12:25 PM)Samseau Wrote:  

Liberty Sea unfortunately math is not one of your strong suits,



This is a joke right? This exchanges out to about $8,000 a year. That's barely enough to get car insurance in some states. Minimum wage in America pays double of this.

Tariffs, please. They will crush China and the paper tiger will fold like origami.

Samseau, that's nominally 8000 USD. But in purchasing power it is more like 15000 USD, because goods in China are cheaper.

According to the World Bank, China's Nominal GDP per capita is 8123 USD, but its PPP GDP per capita is 15535 USD.
Check it out: http://data.worldbank.org/indicator/NY.G...cations=CN

[Samseau]

That's... a little bit better, I guess? The "average" (read: Communist propaganda designed to make China look good - USA does it too) worker in China is almost as good as a minimum wage laborer in America.

Are these the wages you think Americans should be competing for? Perhaps China should pay America's taxes too since they have all of these high paying jobs.

[Liberty Sea]

Samseau, I did not say anything about whether Trump should slap tariff or not. I only corrected your data so that you can draw better conclusion from the data yourself.

My point is, the Chinese government is not dooming their citizens into perpetual wage slavery. Wage has been doubling every ten years or so, and so is their purchasing power (which is what matters). So they do save a lot and do get out of poverty. Of course their income is still low compared to the average American, but that is because China is still a developing country who was in absolute poverty a mere 40 years ago, while America is one of the most developed countries. The point hence is not that their wage is high, but that it has been truly increasing - way faster than inflation. The trend indicates that their income will steadily increase for a long time to come, and anyone who has visited China every 5 years or so can attest to this. So it's no mere propaganda.

I've also pointed out that due to various favorable industrial conditions in China that doesn't come from currency devaluation (macro-stability, huge supply of labors willing to compete for lower wage, skilled workers, experienced managers, pro-business officials, workaholic culture; plus world-class infrastructures, excellent logistics, complete and advanced supply chain, industrial clustering, economy of scale, high-tech capacity factories, easy land acquisition, low and simple and unified tax code, low regulation, etc. - which all reduce production cost), capital will naturally flow there. There advantages against both developing and developed nations will remain even if currency devaluation is stopped and wage rise accelerates.

Furthermore, the Chinese government is in fact trying to strengthen the yuan (which has been depreciating in 2016 due to capital flight and not deliberate manipulation by the government. Specifically 2016.).

And also, as I have pointed out, enhanced automation and technology are much more responsible for lost jobs than trading is. So even if factories come back to the US, automation will likely be massively enhanced to reduce production cost. The iron law of capitalism is to maximize profits, and hence production cost must be minimized - as much as possible. Many jobs will just be taken by robots.

So, while slapping a tariff will produce certain positive effects, it may not be as big as you think. Just my two cents - some facts to put into consideration, not a policy dictation.

[Samseau]

Quote:

Wage has been doubling every ten years or so, and so is their purchasing power (which is what matters).

Zero reasons to assume this will continue indefinitely. China's been on a roll at the expense of the USA. Let's see what happens when they can no longer undercut US manufacturers with peasant wages.

Quote:

And also, as I have pointed out, enhanced automation and technology are much more responsible for lost jobs than trading is.

While automation is massive, it is debatable how many jobs are actually taken by robots. Someone still needs to build and maintain the robots. Preferably these jobs should be in America.

If tariffs do not help enough, and robots are super productive enough to lower costs of goods, then a minimum income type plan becomes feasible. We shall see.

[AnonymousBosch]

Have you ever had that unexplainable feeling of deja-vu? Where you can't quite put your finger on the reason why, but your gut is convinced you've lived through the exact same experience before?

It's probably nothing.