Posted on 09/08/2019 4:15:41 AM PDT by WWG1WWA
Unexpectedly, are we to be drinking this early in the A.M.?
Yeah that word definitely doesn’t work there in the title when it explains exactly how exports fell “unexpectedly.”
Blame it on Trump!
Modern journalists. Perhaps they did hit the bottle, but then, so did the editor.
Beware the middle class.
UNEXPECTEDLY.........drink
They fall unexpectedly, and yet remain robust?
Hmm, maybe China will focus more on improving its internal economy, since exports to the US are dropping.
One thing I do not quite get is, what is the benefit to China of simply having more cash? Unless cash is a proxy for goods and services, it is worthless. And all China is doing is importing cash (the trade surplus), which they have decoupled from any tangible value. Having warehouses of money cant do them much good. Unless they are planning to dump it all on the world economy and cause major recession? Will China eventually realize that maintaining a trade surplus means they are giving away real products of their citizens labor for very little value?
On the US side, of course, the imbalanced trade means that we are locking people out of the job market in return for cheap goods that they cannot afford since they dont work.
If there is a China Profit and Loss report, you are focusing on the bottom line and the balance sheet cash
You overlook the expense account of wages and salaries. If sales slow then the need for workers to make the products not sold diminishes. At sme point employee rolls must be cut....... layoffs.
In an economy drunk on growth, a reversal will hit workers hard. Large numbers of the layoffs can occur in the Pearl River Delta region adjacent to Hong Kong
People are out in the streets of Hong Kong in the hundreds of thousands
If that disease jumps the border to those layed off......... big problem
Very similar to what I often say. Amazing how China got suckered into providing us an incredible amount of tangible goods, in exchange for paper, the value of which could be wiped away at any moment.
https://www.urbandictionary.com/define.php?term=Unexpectedly
unexpectedly
The favorite adverb of major news organizations when describing dreary economic news since 2009. It is believed to have originated around May 19, 2009, when Reuters reported “new U.S. housing starts and permits unexpectedly fell to record lows in April . . . denting hopes that stability in the housing market was imminent.” Has since been incorporated into the style book of the Associated Press, as well as other journalistic entities.
China has few natural resources. Especially when considering their need. They have a huge population. And they export vast amounts of goods. So, they need to import. Imports require dollars. Oil alone is a big reason for dollars. They buy oil with dollars. Remember China is the largest new car market. Most people in China did not own a car ten years ago. Now they drive and consume gas. Besides oil, most commodities China needs are traded in dollars.
So dollars come in and go out. Right now they are supposed to have $2 trillion dollars. But they have money flowing out in personal bank accounts. They buy resources and energy from other countries. So the $2 trillion is getting smaller. Its not growing. Japan is now the largest holder of US debt. Thats because China has been selling our bonds for dollars.
China’s money is going into a hugely accelerated military build out and into R&D for the nest super-weapon.
Last year China had one converted Ukraine-built carrier; this year the next ski-jump home-built one launches; in the following years: a steam launched carrier; and the one after that, a nuclear EMALS one launches. They will quickly achieve a blue water fleet and unless the US begins building, quickly surpass the US Navy in ships.
China is also building out its heavy ice-breaker fleet to include nuclear powered ones (the US has only 1 semi-working conventionally powered heavy).
The J-20 PLAF (anti-access gen-5) fighter has come on line.
Cities are being built all over - even if no one lives there.
That’s where a very large part of the money goes.
...Unless cash is a proxy for goods and services, it is worthless.
BUT cash IS a proxy for goods and services, and definitely not worthless.
Tangible goods deprecate. Most become trash in a short while. That paper you describe might lose a little value due to inflation if kept in a box, but if properly utilized it multiplies.
That last line was great.
Well they’re not tanking, the exports but I never expected that.
I expected it to be like an old 15 round heavyweight match.
Each round one guy gets hit more than the other and his legs start to get wobbly around the 8th or 9th round.
Nothing is overnight though that’s what too many Americans are used to.
Every month that goes by puts us in a better position.
So much is going out now (capital flight) that China is attempting to stop it.
Good luck with that.
When the new wealthy of China see the purchasing power of their devalued Yuans cratering they will naturally try to do something about it. That would include exchanging it for physical currency such as gold or exchanging it for other currencies or traded securities.
“Unexpectedly, are we to be drinking this early in the A.M.?”
LOL! I’ll put some Bailey’s in my coffee, if it will help the cause! :)
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