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i took some time to reread his posts and PM with him and i don't think he's trolling anymore. i just think he did a really terrible job at explaining his position and shot himself in the foot really early on in the argument with shit like this:
Ok. Let's make half of China unemployed and let's not export stuff. Now what? Now Chinese work less hard and have more wealth to consume as wealth isn't exported. How is this bad?
Wouldn't it have been easier to say "let's make half of China work half as much and not export stuff"? at least that would have sidestepped that whole unemployment clusterfuck that didn't really have to do with anything at all.
I'm not saying that I agree with everything he says, but his basic position is something that most people can agree upon: china's government is keeping the yuan-dollar exchange rate artificially low which diminishes the relative wealth of the chinese population.
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On January 09 2010 14:00 skronch wrote:i took some time to reread his posts and PM with him and i don't think he's trolling anymore. i just think he did a really terrible job at explaining his position and shot himself in the foot really early on in the argument with shit like this: Show nested quote +Ok. Let's make half of China unemployed and let's not export stuff. Now what? Now Chinese work less hard and have more wealth to consume as wealth isn't exported. How is this bad? Wouldn't it have been easier to say "let's make half of China work half as much and not export stuff"? at least that would have sidestepped that whole unemployment clusterfuck that didn't really have to do with anything at all. I'm not saying that I agree with everything he says, but his basic position is something that most people can agree upon: china's government is keeping the yuan-dollar exchange rate artificially low which diminishes the relative wealth of the chinese population.
This is because China is sacrificing national welfare for a boost in national output. This is a whole other topic that's up to debate.
This thread reminds me of this:
http://www.teamliquid.net/forum/viewmessage.php?topic_id=79544¤tpage=33
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China don't need to rely on exports. Indeed our economy is shaped in such way but when you have 1.2 billion people, you should have enough market to satisfy your own enterprises.
Export oriented Chinese economy will see some big changes in the next few years.
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The few last decades have seen a surge in both the purchasing power of chinese people and the know-how of chinese companies for making technologically advanced products. China is switching from being the worlds workshop to producing higher-value products and relying on its own (huge) internal market.
We might not see as many "made in china" products in the future as we do now (or rather it won't be the same range of products). Actually companies have been looking for some years now for other places to plant their low-skilled factories in, but it's not that easy to find a place that fills all the prerequisites.
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We've seen a lot of growth in urban parts of China, areas are so densely populated. Unfortunately theres still a large fraction of rural PRC that hasnt seen any significant growth or progress. Fact is corporations and government can easily exploit this group, and the people will not have any say. Since there is barely any political freedom in China, sacrificing human rights for development and economic power... No problem!
edit: Probably be closed sooner or later because of its low rating and flame wars. Oh well.
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On January 09 2010 14:36 haduken wrote:
China don't need to rely on exports. Indeed our economy is shaped in such way but when you have 1.2 billion people, you should have enough market to satisfy your own enterprises.
Export oriented Chinese economy will see some big changes in the next few years.
We would have such a huge surplus in consumer products and it will take a long time for the global economy to adapt to it.
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Baltimore, USA22253 Posts
Fucking christ. You idiots with the "Glaucus is clearly trolling.", "clearly completely ignorant or an awful troll", "Did I read this correctly, or did I get trolled? HARD?", and posting PM conversations just to berate the guy even further derailed this thread harder than the things he wrote did.
Every single one of you should be apologizing to Disregard for fucking up his thread.
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Sorry Disregard. for derailing your thread 
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On January 09 2010 17:10 EvilTeletubby wrote:
Fucking christ. You idiots with the "Glaucus is clearly trolling.", "clearly completely ignorant or an awful troll", "Did I read this correctly, or did I get trolled? HARD?", and posting PM conversations just to berate the guy even further derailed this thread harder than the things he wrote did.
Every single one of you should be apologizing to Disregard for fucking up his thread.
They really should be apologizing to Glaucus though, even if he didn't understand the abcs of economics, he's clearly not trolling. Forum posters posted replys that he obviously was incapable of digesting, then they bashed him further for not understanding whatever poorly constructed explanations they gave. The misunderstood replys and unwarranted bashings generate more curiosities and defenses from Glaucus, creating a vicious cycle.
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China produces consumer goods and then takes the money from the consumer goods and sells them abroad to gain money which they plow into capital goods in an export-led growth model. If China were to "work half as hard and keep all their stuff" many Chinese would see an immediate rise in living standards but the "Chinese miracle" that is 10% economic growth year after year would slow down substantially. The Chinese are not making shit and then giving it away for free. They are making shit and selling it for cheap in order to maximize their own productive output, and this strategy creates economic growth.
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Baltimore, USA22253 Posts
On January 09 2010 17:27 GoodWill wrote:Show nested quote +On January 09 2010 17:10 EvilTeletubby wrote:
Fucking christ. You idiots with the "Glaucus is clearly trolling.", "clearly completely ignorant or an awful troll", "Did I read this correctly, or did I get trolled? HARD?", and posting PM conversations just to berate the guy even further derailed this thread harder than the things he wrote did.
Every single one of you should be apologizing to Disregard for fucking up his thread. They really should be apologizing to Glaucus though, even if he didn't understand the abcs of economics, he's clearly not trolling. Forum posters posted replys that he obviously was incapable of digesting, then they bashed him further for not understanding whatever poorly constructed explanations they gave. The misunderstood replys and unwarranted bashings generate more curiosities and defenses from Glaucus, creating a vicious cycle.
True, although I thought Glaucus was egging it on a bit early, he did take the higher road and try to take it to PMs when he saw he wasn't getting through (and then the guy he was PMing had the bad taste to post the convo). Either way, I think everyone involved could have handled it better.
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Are you kidding me? It's like Glaucus never heard of competition. How can you argue economics without a basic understanding of it?
On January 09 2010 10:47 Glaucus wrote:
How are they making money by keeping prices low? If you get more money for your product that means the price has to be higher. If you keep the price really low you get a really low amount of money. You realize it's the same thing?
What use is having a huge 'trade surplus' if that means you export almost everything when you get nothing in return? The point of exporting is so you can import stuff yourself too.
Chinese people work hard and then all the stuff they produce goes to the US and Europe. US pays money but US has huge depth and is never going to replay those depths. So what use is the dollar?
When are the Chinese people going to get some stuff the Americans produced for them?
How does China need other countries to consume their wealth for them to be rich? Doesn't that make China poorer? Imagine if China could keep all the capital they produce.
America produces goods and services. China doesn't produce capital, it produces goods. If you keep prices low, you might not get as much money for each item, but it keeps people coming to your store to buy the shit you made instead of the stuff someone else made. Also, if you sell enough shit, you won't make a huge profit from each item, but added up, those profits add up. How can you earn money with high prices? Other people would see you making money, come into the market with the same kind of good, charging less, and you're fucked. You either leave the market or you have to cut your prices too which eats into your profits or forces you to find some way to lower your costs.
On January 09 2010 12:41 Glaucus wrote:
Chinese people want plasma TVs. They want stuffed animals. They want all these things they produce. And if they had them they would be much richer. But they can't afford them currently because of the yuan-dollar relation.
Someone else talked about jobs. People claim that if the west stopped consuming Chinese people would all go unemployed and that would be bad.
People seem to think huge US consumption drives the global economy. The fact is it drags down the global economy. Chinese production, and production from other low wage countries, drive the global economy. But Chinese people aren't benefiting from this. The people in the US and in the west are the ones with all the consumer goods. They are enjoying them and they are to be wealthy. Yet they are dragging down the economy. And how did they pay for them? By loaning money from China...
China pegs the yuan to the dollar to keep its value unnaturally low to promote its exports. American consumption DOES drive the global economy. Without Americans buying Chinese goods, money wouldn't flow into China. But America exports billions of dollars worth of goods and services to China. It's not even close to as much as we receive, which leads to the trade deficit, but it's not nothing. China also has a trade surplus with Europe and Japan.
TAKE A BASIC MACROECONOMICS COURSE! JESUS
Also, not every moron is a troll. Please stop treating them as such.
Free markets and democracies are fundamentally opposed in the pure, theoretical sense. In practice, with regulation and imperfect democracy, the two systems can live in tandem, although it's not a perfect fit and there will always be a class conflict. It's hard to take your support away from a system that gives you items at ridiculously low prices, especially when people are trying to spend as little as possible on non-essentials. But they're able to have their low prices at the cost of no regulations or any kind of quality assurance program like we have in the United States. Ironically, low prices don't come cheap.
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Consuming capital reduces wealth. How is consumption beneficial to the global economy? If no one consumed anything we would just have to produce a bit more than zero to be infinitely rich.
I think some of you need to take basic economics or unlearn the fallacies you picked up somewhere along the road.
The US buys Chinese goods on credit. Credit that's loaned from China. They borrow money from China to buy their stuff. And the US isn't able to pay those loans back. So yes China is giving stuff for free. Yes, China is maximizing their production and that's something in itself. But all experts I have heard on the issue don't seem to understand why China is doing this.
EmeraldSparks is exactly right about this. But I don't see anyone attack him.
And all this is possible because of artificial low yuan. How is this not creating a bubble? We already know the US will have to stop spending and start saving or they will go into depression. Then China has to reorganize their factories to make stuff aimed at other markets. That's going to have some effect. Roubini is even predicting the next crisis to be in China.
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No one is attacking EmeraldSparks because he posted relatively recently and what he posted isn't wrong. I already posted about the artificially low yuan. America has already slowed spending and started saving. America is already in a recession. Recession is not the same thing as a depression. China already trades with the 3 largest economic areas in the world: Japan, Europe, United States, and has strong ties to other growing economies.
You can't talk about other people needing to learn basic economics when you say "Consuming capital reduces wealth. How is consumption beneficial to the global economy?"
In economics, capital or capital goods or real capital are factors of production used to create goods or services that are not themselves significantly consumed (though they may depreciate) in the production process.
Consumption DRIVES the global economy. Without consumption, you have a bunch of products sitting in warehouses doing nothing.
Idiot.
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What do you call it if all supply is satisfied? If we have goods sitting on the shelves and there is no more demand then what's bad about that? Isn't that what you try to achieve by producing in the first place?
The more you have to consume the more you have to produce, obviously.
The US isn't slowing down on spending. It is spending more than ever to stimulate the economy.
Yes, China is also trading with other countries. US is less relevant and the whole world will decouple and be relieved on US consumption. But the US China relationship is just a good clear example.
You think you can call me an idiot because I typed 'capital' instead of goods. But that means nothing. If you think we get rich by consuming then that's very very odd if you ask me. I don't really care in how many textbooks you claim you can find it.
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When all supply is satisfied, I call it satiated.
If everyone has goods sitting on the shelves, that means that no one is getting what they need, firms aren't getting money for their products, workers aren't getting paid, people can't afford to buy food, the entire system collapses. What you try to achieve when you produce is goods that can be consumed, from which you earn currency, which can be used to acquire capital, which produces more goods. Throughout this system, you hope to earn profits.
The American CONSUMER is spending less. The American GOVERNMENT is spending more. It's completely different. The United States will probably become less relevant but bar some kind of ridiculous disaster, it will never be irrelevant.
And I think I can call you an idiot because you are an idiot. You have no knowledge about basic economics and you admit it, yet you think you can try to test the knowledge of others. Capital and goods are completely different, as I stated earlier in a post that's also on this page, which happened to be right on top of yours, but you apparently didn't read, to your disadvantage. People don't get rich by consuming. People consume because they have disposal income.
You're a very clueless kid.
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But goods are on the shelf because there's no one to consume it because demand is satisfied...
Maybe I am a clueless idiot who can't read. At least I am consistent. You chance your position every post it seems.
Anyway, the US government is doing the big spending right now, that's true. But the American people pay for it. The US government can't pay for it because governments don't have money of their own.
You are still dodging the point. How does huge spending benefit the global economy? Why are Us consumers spending less? By your logic we could get out of this recession if the US consumers start to spend more once again? Or aren't they? You can't explain this using your reasoning.
Why keep standards of living in China artificially low? The only reason I can think of is that the Chinese governmental does want to be a large economic power but doesn't want there to form a middle class because democracies only arise once a middle class forms.
I never admitted to having less knowledge of economics than you. Clearly I have more knowledge than you have. You think the Chinese get rich because the US spend their stuff and squander the money China invests in them...
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You call me an idiot. But in another topic you say that Peter Schiff is a reasonable man. But he happens to say the exact same thing on China as I am. He also doesn't understand why some economics claim the world needs the US to consume our stuff and why China keeps the yuan low so Chinese people can't consume their own goods...
And there Caller, who apparently studies economics, claims you 'completely misunderstand economics'. You won't believe me because I don't claim to be an authority. Maybe you will believe him?
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Consistency is overrated and is nothing to be proud of, not that I was inconsistent. In the fact of overwhelming evidence, you have to be able to change your views.
I was going to refute all your points with a huge post but it wouldn't help anything. You're just an unintelligent child that happens to have internet access. You need to get off the computer and into a classroom immediately, or at least wikipedia. Any of your questions would be answered by a simple introductory economics course.
"How does huge spending benefit the global economy?"
You obvious have no idea what the word economy even means. Namedropping Peter Schiff and Caller doesn't change the fact that you don't know a thing. I know what caller said and I responded to him. He is an intelligent and respected poster.
You are nothing.
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No need to get angry. I'm just telling you I don't make this stuff up myself. I just listen carefully to well-respected economics.
Just pointing out that Peter Schiff also disagrees with your ideas about consumption which you refuse to provide arguments for because I once typed 'capital' instead of 'wealth'. "I was going to refute until..."-line is really weak.
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I'm angry? Hm well I suppose I am.
You listen to well-respected economics?
Well excuse me.
wait a second...are you sure you didn't meant economists?
Your attempt to argue about economics, when you don't know what economics is or what capital is, is really weak, as is your command of the English language.
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EPT
