Posted on 07/29/2002 7:41:35 PM PDT by Enemy Of The State
When artistic merit is captured on exposed film, it becomes direct labor involved in the manufacture of that film. It is not a "service" but a value-added activity.
Although this is the mechanism by which wealth is created, there is no guarantee that simply engaging in such activities will generate a profit when subjected to competition in a market economy.
As you note, your property value increases (marginally) when your grass is kept trimmed. It is a value-added activity that creates wealth. However, it is an extremely marginal and short-lived form of wealth. Grass grows back quickly, and the value of your property declines in marginal proportion. The economic impact is so marginal that grass trimming can essentially be viewed as a "service", the distinction is virtually irrelevant. A greater value-added impact on your property value would be obtained by extensive professional landscaping.
I don't think I can agree with you. How large is Hong Kong and how much manufacturing do they do? Their standard of living was higher than the U.K. (at least before the commie takeover) I believe most of their economy was trade and services.
Please tell me if I'm missing anything.
This situtation is NOT in America's best interests.
OK, what do the Chinese do with our money? It doesn't do them any good if they just collect the interest and sit on it.
Money is only good for what you can buy with it.
If they do buy things with it, it creates jobs here, doesn't it?
My guess is they'll turn around and reinvest it in even more T-bills.
That way they'll collect even more interest from our taxes.
At some point, it's possible that we could default on our debt.
In that situation, it's conceivable that they'd demand seizure of some of our assets.
We purchased Alaska from Russia long ago.
Considering the oil and geographical proximity of Alaska, perhaps that's what they'd want in payment of our debt.
We might even be forced to toss in Hawaii.
In case you haven't noticed, the Fed no longer has much control over interest rates, money supply, economy or anything else. 9 Fed Funds cuts in one year, and long-term rates barely moved. The financial markets have evolved to the point where the Fed has very little influence. If the Chinese are dumping Treasuries, what's the Fed going to do? Buy them all? With what?
At some point, it's possible that we could default on our debt. In that situation, it's conceivable that they'd demand seizure of some of our assets. We purchased Alaska from Russia long ago. Considering the oil and geographical proximity of Alaska, perhaps that's what they'd want in payment of our debt. We might even be forced to toss in Hawaii.
Oh no, they'd demand Alaska. Perhaps we'd tell them to pound sand. They can buy all the T-Bills they want. We can print the money to pay them back. Paper is cheap.
You've accidentally stumbled into the truth and don't even realize it. You don't know how the Fed creates money, do you? They "buy" treasuries from banks and "give" them a deposit slip that says "You have a balance at the Federal reserve of X billion dollars" The Fed could buy back the Chinese Treasuries without breaking a sweat.
Nah, the bankers wouldn't stand for that. They get a commission on the transaction no matter which way it goes. But they may persuade China to accept Kalifornia instead: there's a lot more mortgages to foreclose on and eviction notices to serve. Bankers like that!
They can buy all the T-Bills they want. We can print the money to pay them back. Paper is cheap.
True, devaluation is another option... if you don't mind pushing a wheelbarrow full of money to the corner store just to buy a loaf of bread.
It's only devaluation if they spend the money. If they keep it under their mattress, it doesn't cause inflation. If they do spend it, it creates jobs. I'm still not worried.
China has their own banking problems. Bad loans to state owned companies that will never make a profit and never pay back the loans.
Kind of like U.S. steel companies.
My cat isn't worried about it either, though I've tried to explain it to her in relatively simple terms.
That's OK, she's entitled to a more carefree life, she doesn't owe anybody a penny.
I hope the Chinese don't demand your cat as repayment on our Treasuries.
When you speak of "wealth generation," I assume you're speaking of actual profit generation because wealth comes directly from profit. The entire service sector doesn't merely transfer wealth, but the profit motive drives service sector businesses to engage in their respective businesses. And when service sector businesses try to generate profit, they inevitably generate wealth. If there were no profit to be made and wealth to be generated in the service sector, service sector businesses would have no reason to engage in those businesses at all. But since they do generate profit and real wealth, that's why they engage in the service sector businesses in the first place.
Your logic is impeccable.
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