Posted on 01/28/2006 8:56:58 PM PST by maui_hawaii
It is 9 pages of fairly large print so its easy to read.
Excellent speech.
China being a responsible actor is a good thing. However one thing that is out there right now that is little talked about is the oncoming correction.
China has been exporting goods to the US at massive rates and through its export oriented and subsidy laden economic model has created and artificial price for its exports. Export led growth for China is our enemy in the mid term, not for the most obvious reasons.
In other words, the man giving the speech points out some extremely relevant points about how China has helped the US economy... however...
I am of the belief that the economic situation in China in relation to the rest of us will ultimately correct itself.
Those prices that assist in corporate profits and keeping inflation under control are potentially just as much a negative.
We can either let the situation fall into our lap, or we can escourt it in under control.
In other terms, you can only sell something cheaper than its sum total costs for so long. Eventually things must correct.
Responsibility on China's part means they need to help escourt in the change. It will require them to undertake a difficult road and literally shift strategy.
ping
I should expand and say that it is coming up on us quickly and may create long reaching problems.
I am not, as many freepers will assert, referring to them taking our jobs, outsourcing, etc in the generic sense. Not at all. Of course some might not like that, but thats not exactly what I am talking about.
I am talking about the economic consequences of A) their economic export led model, and B) our over reliance on it.
If we do not pressure China to change, and it could be through punitive actions, we may well end up in just as much trouble as they will be.
If we ourselves don't foster a diversified portfolio we could create a heap of mess up the road for ourselves.
There are some freepers who quite stupidly say and believe that 'if you say the word tarriff you are a protectionist'...they just dig their trenches and go at it.
That kind of talk is ignorant on their part.
I am talking about creating a diversified and balanced system of global trade. That is not anti trade, nor is it protectionist. However in order to get there we have to get China off the mama sow and to do things differently...
If not, we will run into a time reminicent of the bursting of the tech bubble, but potentially worse...
Having carefully read both what Ambassador Bhatia said recently and your comments here, I can say that I find no contradictions between them. You are both "singing of the same sheet of music" and I find nothing with which to disagree in any it.
In my own humble opinion we in the United States need to get our own house in order in a number of areas, particularly our domestic tax policy, so that we need not fear competition from any quarter so long as that competition is made to operate within the rules.
Its not a one or the other thing...in fact it better be a BOTH kind of thing...
The two are two solid and attainable measures that will lead to us have a more sure economic foundation going forward.
Oh Absolutely! Couldn't agree more!
Hope I didn't make it sound otherwise earlier.
Please read the article (easy reading) and then do some thinking on your own and lets all post.
When that happens, US savings will rise a few percent slowing growth modestly for a couple years. Whoopie do. Should we be ready for that, sure. Is it better to get there by a glide path than all at once in a disruption, sure. If long term IRs go up 2 points you are probably there already. So, what is supposed to be the punchline?
(crrrkkk... crrrkkkk...)
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