China warns ,don’t appease trump

[jas007]

2 minutes ago, placeholder said:

There is absolutely no evidence of that Trump knows that at all.  He's been very clear over and over again that he thinks a trade imbalance is proof of unfairness. I'm sure that most of his advisers, with the big exception of Peter Navarro, know that this is nuts.

How am I supposed to find evidence of something that's so fundamental that it goes without saying?  It's  like asking me for evidence that Trump is well aware that 2 + 2 =4.  Everyone who knows anything about world trade and the world reserve currency knows how it works.  For the USA to run the world reserve currency is a major benefit for the simple reason that the Central Bank can counterfeit money.  Of course, they pretend that's not the case, but the world needs the dollar, regardless, at least for now. 

 

And I'm sure Navarro knows as well.  Any undergrad economics major knows how it all works. What Navarro seems to have misjudged is the difficulty in upending the existing world order simply by way of tariffs. Theoretically, tariffs could work if all parties agree and the result is a level playing field.  But he didn't accurately judge the blowback, the embedded corruption, and the extent to which the world propaganda machine can control minds.  In other words, he was politically naive. 

[placeholder]

3 hours ago, jas007 said:

How am I supposed to find evidence of something that's so fundamental that it goes without saying?  It's  like asking me for evidence that Trump is well aware that 2 + 2 =4.  Everyone who knows anything about world trade and the world reserve currency knows how it works.  For the USA to run the world reserve currency is a major benefit for the simple reason that the Central Bank can counterfeit money.  Of course, they pretend that's not the case, but the world needs the dollar, regardless, at least for now. 

 

And I'm sure Navarro knows as well.  Any undergrad economics major knows how it all works. What Navarro seems to have misjudged is the difficulty in upending the existing world order simply by way of tariffs. Theoretically, tariffs could work if all parties agree and the result is a level playing field.  But he didn't accurately judge the blowback, the embedded corruption, and the extent to which the world propaganda machine can control minds.  In other words, he was politically naive. 

How are you supposed "to find evidence of something so fundamental that it goes without saying?" Really? Remember Donald Rumsfeld's "Absence of evidence is not evidence of absence"? But at least in that case there was not much contrary evidence. But in this case there is an overwhelming amount of evidence that Trump hasn't a clue.  But that doesn't count?  Not even Rumsfeld ever said "Absence of evidence isn't evident of absence and counter-evidence doesn't count." I'll leave that kind of nonsense to you. And you claim you're not in the bag for Trump? It is to laugh.

 

And it's not even clear that you understand this issue. What has the US being the world's reserve currency got to do with the basic economic fact of currency flows?

[jas007]

16 hours ago, placeholder said:

How are you supposed "to find evidence of something so fundamental that it goes without saying?" Really? Remember Donald Rumsfeld's "Absence of evidence is not evidence of absence"? But at least in that case there was not much contrary evidence. But in this case there is an overwhelming amount of evidence that Trump hasn't a clue.  But that doesn't count?  Not even Rumsfeld ever said "Absence of evidence isn't evident of absence and counter-evidence doesn't count." I'll leave that kind of nonsense to you. And you claim you're not in the bag for Trump? It is to laugh.

 

And it's not even clear that you understand this issue. What has the US being the world's reserve currency got to do with the basic economic fact of currency flows?

For what it's worth, I'm pretty sure you're the one who doesn't understand the "system."  

 

You keep using the same mindset, thinking that the system is not dynamic and that you can point to a single issue as "proof" of some point your'e trying to make. And the issue you're trying to point to here couldn't be further off the mark.  If you understood anything, you'd know that.

 

The world's reserve currency has just about everything to do with currency flows. 

 

Do you even understand the concept of a "world reserve currency"?  Such a status for the US dollar means investors around the world need dollars for a variety of reasons.  International trade is conducted in dollars. Oil, for example, until recently.  Long term contracts are denominated in dollars, and countries often hold US dollar bonds as one of their reserves.  Even currencies are trades with the US dollar as the delivery vehicle. Hence a continuing demand for US dollars.  Money flows into the US financial markets.  Even the stock market is affected as overseas investors park money there.  Without the world reserve currency, this flow of money would dry up.  That's sort of what's beginning to happen, but the process can take years.  Look at the British Pound.  It stopped being the World Reserve Currency by way of the Bretton Woods treaty in 1944, but its use persisted  around the world for years. Today, it's just 4% or 5% or reservers held around the world.  

 

All that money flowing into the US allows people in the US to buy junk made overseas. The US sends out dollars printed by the Fed out of thin air and accumulates a trade deficit in the process. The people in the US get junk made in China or wherever. That's a pretty good deal for some people, until the system breaks down. Eventually, money printing and the resultant interest rate increases eventually cause hyperinflation or very high inflation to the point where it's to longer politically feasible to continue. 

 

There are other factors as well, but I'll stop here.  

 

Actually, maybe you're just giving me a hard time?  Everyone involved in the markets and in the financial system should know this.  It goes without saying.  Seriously. 

 

 

[placeholder]

4 minutes ago, jas007 said:

For what it's worth, I'm pretty sure you're the one who doesn't understand the "system."  

 

You keep using the same mindset, thinking that the system is not dynamic and that you can point to a single issue as "proof" of some point your'e trying to make. And the issue you're trying to point to here couldn't be further off the mark.  If you understood anything, you'd know that.

 

The world's reserve currency has just about everything to do with currency flows. 

 

Do you even understand the concept of a "world reserve currency"?  Such a status for the US dollar means investors around the world need dollars for a variety of reasons.  International trade is conducted in dollars. Oil, for example, until recently.  Long term contracts are denominated in dollars, and countries often hold US dollar bonds as one of their reserves.  Even currencies are trades with the US dollar as the delivery vehicle. Hence a continuing demand for US dollars.  Money flows into the US financial markets.  Even the stock market is affected as overseas investors park money there.  Without the world reserve currency, this flow of money would dry up.  That's sort of what's beginning to happen, but the process can take years.  Look at the British Pound.  It stopped being the World Reserve Currency by way of the Bretton Woods treaty in 1944, but its use persisted  around the world for years. Today, it's just 4% or 5% or reservers held around the world.  

 

All that money flowing into the US allows people in the US to buy junk made overseas. The US sends out dollars printed by the Fed out of thin air and accumulates a trade deficit in the process. The people in the US get junk made in China or wherever. That's a pretty good deal for some people, until the system breaks down. Eventually, money printing and the resultant interest rate increases eventually cause hyperinflation or very high inflation to the point where it's to longer politically feasible to continue. 

 

There are other factors as well, but I'll stop here.  

 

Actually, maybe you're just giving me a hard time?  Everyone involved in the markets and in the financial system should know this.  It goes without saying.  Seriously. 

 

 

More Orville-Bargo invoking the complexity of the world economy. Apparently if you had your way it would be no such thing as economic models. If the US was the only country that ran trade deficits, you might have a point. But it isn't so you don't.

[jas007]

38 minutes ago, placeholder said:

More Orville-Bargo invoking the complexity of the world economy. Apparently if you had your way it would be no such thing as economic models. If the US was the only country that ran trade deficits, you might have a point. But it isn't so you don't.

Of course other countries run trade deficits. The US isn't the only country on Earth, and it's not necessary to have the world reserve currency to run a trade deficit.  Do you even understand that much?   It's a simple concept.  If I made a list of countries with trade deficits, it would be a long list.  Maybe you should look it up. 

 

As for "economic models"?  What, exactly, does they have to do with whatever point you're trying to make?  Economic models are a dime a dozen.  

 

Unless you're trying to give me a hard time, you should probably stop.  All you're doing is embarrassing yourself.  

 

Anyone schooled in economics or finance understands how everything works, at least on a basic level.  I'm sure all of Trump's advisors understand, even Navarro.  Especially Navarro.  He may just have been politically naive to think it would be easy to upend the world order with tariffs.