Pumping up China's Economy

Washington Times ^ | 3/12/04 | PETER MORICI

[DoctorMichael]

On Tuesday, Richard W. Rahn wrote, "Yet another major reason for slow job growth is the drop in the dollar and the rise in oil prices" ("How to create more jobs," Commentary). The dollar may have fallen against the euro and yen, but China has pegged the yuan at 8.3 per dollar since 1995. This permits China to keep manufactured exports cheap by exchanging yuan for U.S. Treasury securities.

[DoctorMichael]

FYI.................................

This was a 'Letter to the Editor' that caught my eye this morning. The author is a business school professor who's opinion may carry some weight.

[Pylot]

China is going to float the Yuan this fall, September if I remember. It will go up in value substantially.

If you want to make a quick buck, buy some Yuan today.

[DoctorMichael]

Just another opinion to throw into the general conversation here at FR.

"...this fall..."

I had heard that there were discussions underway but was unaware they had finally come to a conclusion.

Too late to have any effect on the Fall election though.

"...buy some Yuan..."

Hmmmmmm...............

[Last Dakotan]

And besides talk what does our government do about this.... (crickets chirping)....nothing..

[RightWhale]

the drop in the dollar

The dollar has risen against the Euro recently. And aginast gold. Oil is up, though, which ought to wake up economic forecasters so they look beyond this afternoon. The price of gold is not critical to the economy, but the price of oil is fundamental.

[DoctorMichael]

"....price of gold is not critical to the economy...."

Agreed. While I own gold, I've never understood the 'gold bugs'.

"....but the price of oil is fundamental...."

I wonder when we can get the Caspian oil fields online? Certainly that clown Chavez in Venezuela hasn't helped the situation.

Also.........Officials have touted the advantages of outsourcing and the cheap labor involved, which gives WalMart all those cheap consumer products. HOWEVER, China, being a major manufacturer now NEEDS energy to produce those goods that we're outsourcing the manufacturing of. Of course, this comes with an increase in demand for oil (energy) from the Chi-coms to produce those goods. I wonder whether we're cutting our own throat in a round-about way here.

IMHO, also.........Additionally, the Chi-coms don't do much for the stabilization of the world anyways. Seems to me between being buddy-buddy with North Korea, secret Nuke-bomb part shipments to Pakistan, bullying of Taiwan, etc. that they are more trouble than their worth (apologies to Dianne Feinswine, Al Haig and Kissinger who have business ties there).

[RightWhale]

Caspian oil has proved out to about 10% of original hype. It wouldn't be prudent to assume vast new reservoirs of oil will be found in time to fuel China's growing need in the next decade. We should plan for maybe not shortages, but certainly increased cost of oil. The cost of oil could rise to a level that would cripple China's economic boom, and our own. Search on Peak Oil if you haven't already taken a look at this. It sounds highly eccentric at first, but check some of the links. It gets interesting.

[searchandrecovery]

Overall, the U.S. trade deficit with Asia and currency manipulation are costing about 1.3 million U.S. jobs.

Bush allowing this to continue is criminal behavior. All economists promise jobs in the future - this is bs. All economists declare that "creative destruction" of jobs in America is Good - this is bs. Bush is at risk, here's why...

The perfect storm of u.s. job decimation: 1.H1-B/L1 visas, 2. Outsourcing, 3. Illegal Mexicans, 4. OPIC, 5. Stupid trade agreements. There will be no net increase of jobs by election day - mark my words. Bush is toast.

[Pentagram]

Bush is toast.

I think you're right.

[Mackey]

...China is soaking up oil, steel and other vital resources at a record pace, running up the price of these critical materials and wreaking havoc on U.S. manufacturers.

I can testify to the increase in prices for nickel alloys. I purchased a 4' x 10' sheet of 1/4" thick alloy 600 for $3,400 in October '03. By January the price for that same sheet had risen to $5,200, more than a 50% increase in cost.