Why Does Geithner Keep Asking China To Raise Their Currency’s Value, Why Make Our Problems In The Us Worse?
I saw again on the news today that Geithner is going to ask China for flexibility in their currency.
Now, when someone argues, it will allow the US to export more, export what, how exactly is the US competitive anymore anyway?
We don’t produce much anymore, we borrow their money to buy their products through the sale of Treasury Bonds.
Here is the article if anyone wants to read it, link is at the bottom:
Geithner to urge forex flexibility in China
Reuters
11 mins ago (on May 28, 2009 in the morning)
WASHINGTON (Reuters) – U.S. Treasury Secretary Timothy Geithner will discuss with top Chinese officials how to boost global economic growth as well as the importance of flexible exchange rates for smoothing imbalances, a senior U.S. Treasury Department official said on Thursday.
Geithner heads for Beijing this weekend and will hold two days of talks next Monday and Tuesday with senior Chinese leaders on a range of issues that may include China’s concerns over rising U.S. indebtedness, the official said.
(Reporting by Glenn Somerville, Editing by Chizu Nomiyama)
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We don’t produce much anymore,???
WTF are you talking about?You need to do your homework sunny Jim, the US is still the largest manufacturer on the planet nimrod
Bullsh!t, worriers like to complain that we don’t make anything anymore. America is being hollowed out. Soon we’re going to be left doing one another’s laundry. Boy, will we be poor then.
At the heart of this concern is the belief that manufacturing is the key to an economy’s success. You have to make stuff. You can’t just move it around or sell it. A nation of services is a poor nation.
In fact, there is no gold-medal industry that is the key to economic prosperity. In 1900, agriculture employed 40% of the American work force. America was pretty prosperous in 1900 relative to the rest of the world. You might have thought that farming is the road to material well-being for a nation. You would have been wrong, of course. Today, agriculture is 2% of the American work force and we are seven to thirty times richer as a nation compared to 1900.
But there is a second confusion in the worriers’ worries, one that I deliberately made in the previous paragraph. You want to distinguish between employment and output. We grow a lot more food today in America than we did in 1900. You also want to distinguish between total employment in a sector and that sector’s employment as a proportion of total employment.
Over the last five years, manufacturing employment has fallen even more dramatically, from about 17 million to under 15 million workers. But manufacturing output is rising:
This series from the BLS starts in 1987 and you have to realize right off that it’s a guess at best. It’s aggregating cars, refrigerators, bed frames and computer chips to get an overall index of total output. But it’s the best we can do.
The index climbs about 50% since 1987. It dipped in 2001 with the recession, but total output has already outpaced the level of 2000.
The bottom line is that we aren’t being hollowed out. We still make stuff. A lot of stuff. A lot more stuff than we did 20 years ago. We’re just doing it with fewer people. How? Productivity. We’ve found ways to make workers more productive so even though fewer people are doing the manufacturing, they’re producing more. Technology and innovation, spurred by the carrot of profits and the stick of losses has allowed that transformation. It makes us richer. It frees up a very scarce resource, people, to go do other things creating new products and services.
We don’t export more cause no one buys at the prices that we produce.
We are increasingly copying a third world country model: exporting raw material (scrap metal) and importing finished goods from China.
Loosening China’s grip on our dollar will allow us to produce and export more thus not only increasing GDP but also reducing unemployment.
Well, the good news is that Geithner knows what he is doing. He has to give an account to the USA in a time of great crisis; you get to sit and ask long questions. If China does what Geithner wants, it would greatly help our economy.
China wants something and boy blunder will give it away.