Posted on 07/29/2002 7:41:35 PM PDT by Enemy Of The State
| China has risen from its 4th place to become the second biggest bondholder claiming US$82 billion worth securities in the US. Japan still with US$317.3 billion securities on hand stays atop. The UK comes third with a sum of US$49.4 billion. Hong Kong takes the 6th place and China's Taiwan Province 9th alongside the others as known from US official data lately released. |
TRADE DEFICIT: Formally termed a balance of trade deficit, a condition in which a nation's imports are greater than exports. In other words, a country is buying more stuff for foreigners than foreigners are buying from domestic producers. A trade deficit is usually thought to be bad for a country. For this reason, some countries seek to reduce their trade deficit by--
- establishing trade barriers on imports,
- reducing the exchange rate (termed devaluation) such that exports are less expensive and imports more expensive, or
- invading foreign countries with sizable armies.
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Wealth is created only by engaging in value-added activities. By the same token, Service sector activities do not create wealth, they merely transfer, redistribute and eventually dissipate wealth as consumption. Thus, as value-added activities move offshore and the U.S. labor force shifts to the Service Sector, wealth is dissipated, not created. And the U.S. standard of living declines as a result.WEALTH: The net ownership of material possessions and productive resources. In other words, the difference between physical and financial assets that you own and the liabilities that you owe. Wealth includes all of the tangible consumer stuff that you possess, like cars, houses, clothes, jewelry, etc.; any financial assets, like stocks, bonds, bank accounts, that you lay claim to; and your ownership of resources, including labor, capital, and natural resources. Of course, you must deduct any debts you owe.
VALUE ADDED: The increase in the value of a good at each stage of the production process. The value that's being increased is specifically the ability of a good to satisfy wants and needs either directly as a consumption good or indirectly as a capital good. A good that provides greater satisfaction has greater value. In essence, the whole purpose of production is to transform raw materials and natural resources that have relatively little value into goods and services that have greater value.
SERVICE: An activity that provides direct satisfaction of wants and needs without the production of a tangible product or good. Examples include information, entertainment, and education. This term good should be contrasted with the term good, which involves the satisfaction of wants and needs with tangible items. You're likely to see the plural combination of these two into a single phrase, "goods and services," to indicate the wide assortment of economic production from the economy's scarce resources.
But George Bush says that entrepreneurial class in China is on our side. I'm sure they will overthrow communists so that they can continue lending us money forever.
"Creative accounting" is definitely wealth transferrence.
There is no "value-added", no wealth creation.
Correct.
Value is not a tangible object.
Correct. Wealth is, at its most fundamental level.
Services that have value result in a transferrence of wealth.
However they do not ADD value, hence, they do not create wealth.
Jiang ought to not be looking ANYWHERE <VBG> (I don't want the ChiComs forming up and marching in any direction except to the unmarked grave of history's discarded ideas).
LOL! I caught your sarcasm, friend!
But you came up with such a good example with "creative accounting", I couldn't resist!
Completely wrong. What is the difference between a) fixing a broken car so it runs like new and b) taking steel and plastic and making a new car ? How about renovating an old house vs. manufacturing a new one ? If the US had better investment advisors (service) they would not have wasted trillions of dollars building (manufacturing) telecom plants and facilities and internet and wireless infrastructures. Here services were more important than manufacturing because the services could have saved trillions, the manufacturing and building wasted trillions. Services are just as important as manufacturing.
Some folks believe that, in a fit of anger, China would dump all its bonds into the secondary market... pummeling the value of our bonds instantly.
We, or someone else, would have to buy them up promptly.
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