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. 

[placeholder]

6 hours ago, jas007 said:

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. 

You're the  party who unnecessarily invoked reserve currency as an issue re: trade balance. I'm party who pointed out that it was irrelevant by noting that it was irrelevant because there are other nations that run trade deficits. And now you're pretending that I need explained to me what I pointed out to you? Sad.

 

I mentioned economic models because once you launched into obscurantism by invoking all sorts of things that don't really affect the trade balance model. And yes, it's a model and a useful one. And if you understand that it's a model then you don't need to start referring to other less relevant considerations.

 

At least, you're not now claiming Trump understands. As for Navarro, who knows and who cares? He's not the one calling the shots. At least with him there would be consistency.

[jas007]

14 hours ago, placeholder said:

You're the  party who unnecessarily invoked reserve currency as an issue re: trade balance. I'm party who pointed out that it was irrelevant by noting that it was irrelevant because there are other nations that run trade deficits. And now you're pretending that I need explained to me what I pointed out to you? Sad.

 

I mentioned economic models because once you launched into obscurantism by invoking all sorts of things that don't really affect the trade balance model. And yes, it's a model and a useful one. And if you understand that it's a model then you don't need to start referring to other less relevant considerations.

 

At least, you're not now claiming Trump understands. As for Navarro, who knows and who cares? He's not the one calling the shots. At least with him there would be consistency.

You really are embarrassing yourself and you really should just stop.  Now you're trying to pretend you didn't say what you said? 

"Trump may not want that but he doesn't betray much understanding of how the trade works. For instance, he has the crazy notion that if your trade balance runs a deficit, that means you're losing and it's the fault of tariffs."

 

Moreover, a discussion of the world reserve currency is absolutely relevant, regardless of what you seem to think.  

 

"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?"

 

The world reserve currency is central to any discussion of world currency flows and cannot be divorced from the tariff issue or the current negotiations with China and other countries.  In short, it isn't simply a question of tariffs and who has a trade deficit, it's a question of the extent to which the trade deficits are out of line with actual trade levels and patterns.  

 

Everyone knows or should know that having the world reserve currency goes hand in hand with running a trade deficit.  It's called the "Triffin dilemma." It's nothing new in the world of finance and economics and was noted by an economist named Robert Triffifn in the 1960s.  

 

So, it's not that the US has a trade deficit with China or any other country. That goes without saying, depending on trade patterns.  What matters to Trump and what matters to his advisors is that the extent to which the trade deficit, particularly with China, reflects something more than just the balance of trade.  Currency manipulation, for example.  Or, governments subsidizing entire industries.  Or the theft of intellectual property and the effects of political corruption.  In other words, Trump is trying to achieve a level playing field and wants to use tariffs as a tool to accomplish just that.  Many economists will tell you that tariffs are a stupid way to proceed, but maybe not.  If the system were not broken, it might be worth a shot at trying to make adjustments through more traditional means.  If there were no corruption and no continual theft of intellectual property as a business model, traditional diplomacy might work.  But none of that has worked in the past and Trump wants to use tariffs.  Navarro's idea? Anyway, that's what's happening and that's why we discuss the world reserve currency.  
 

Mods edit: Corrected formatting so post can be read.

[placeholder]

2 hours ago, jas007 said:

You really are embarrassing yourself and you really should just stop.  Now you're trying to pretend you didn't say what you said? 

"Trump may not want that but he doesn't betray much understanding of how the trade works. For instance, he has the crazy notion that if your trade balance runs a deficit, that means you're losing and it's the fault of tariffs."

 

Anybody who wants to know where this is coming from should read this comment from jas007. 

 

"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."

 

In it, and I'm not making this up, he asserts that the proof that Donald Trump understands the real reason why trade deficits exist and that they aren't necessarily a bad thing  is that he never ever talks about those reasons. jas007 completely ignores the fact there is copious evidence from Trump's own mouth and tweets that he ardently believes quite the opposite. jas007 goes even farther than Donald Rumsfeld did when he wrote that "Absence of evidence is not evidence of absence". In this case we have huge quantities of evidence to the contrary and yet jas007 ignores it. Actually what we have in this case is the equivalent of Trump denying that 2+2=4.

 

And I'm the one who should be embarrassed? Actually, you have the advantage of me here. Anyone who writes the kind of tripe you did defending Trump most likely is shameless.

 

[jas007]

16 minutes ago, placeholder said:

Anybody who wants to know where this is coming from should read this comment from jas007. 

 

"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."

 

In it, and I'm not making this up, he asserts that the proof that Donald Trump understands the real reason why trade deficits exist and that they aren't necessarily a bad thing  is that he never ever talks about those reasons. jas007 completely ignores the fact there is copious evidence from Trump's own mouth and tweets that he ardently believes quite the opposite. jas007 goes even farther than Donald Rumsfeld did when he wrote that "Absence of evidence is not evidence of absence". In this case we have huge quantities of evidence to the contrary and yet jas007 ignores it. Actually what we have in this case is the equivalent of Trump denying that 2+2=4.

 

And I'm the one who should be embarrassed? Actually, you have the advantage of me here. Anyone who writes the kind of tripe you did defending Trump most likely is shameless.

 

You're embarrassing yourself. Repeating the same nonsense over and over doesn't prove your case.

 

Even if we assume, arguendo, that Trump at one time in his life may have believed otherwise, you can be sure that he has now been  instructed and knows how it works.  

 

Anyone who knows anything about how world trade and the financial markets work knows full well that you cannott have both the world reserve currency and no trade deficit at the same time.  It's a fundamental truth and no explanation is necessary. No evidence is necessary. It's part and parcel of the system.  Navarro has a Ph.D. in economics from Harvard, and is now a Professor Emeritus at the University of California, Irvine.  No one gets to the levels in the academic world without understanding how things work.  In fact, no one gets through an entry level course in macroeconomics without knowing how things work.  You'd get an "F."

 

And you can pretty much assume every single member of Trump's Cabinet knows how things work.  

 

So go ahead, continue to make yourself look silly.  I assume you never had a job in the financial world?  And if you have any kind of money in the market, I hope you're smart enough to let someone else manage it for you.  

 

 

[placeholder]

2 minutes ago, jas007 said:

You're embarrassing yourself. Repeating the same nonsense over and over doesn't prove your case.

 

Even if we assume, arguendo, that Trump at one time in his life may have believed otherwise, you can be sure that he has now been  instructed and knows how it works. 

 

We can be sure why? Because there is still no evidence to support that belief? And a huge amount of current evidence to the contrary? And you claim not to be in the bag for Trump. It is to laugh.

[jas007]

3 minutes ago, placeholder said:

We can be sure why? Because there is still no evidence to support that belief? And a huge amount of current evidence to the contrary? And you claim not to be in the bag for Trump. It is to laugh.

 It's basic stuff.  Sort of like the air we breathe containing oxygen. Trump knows. How can he not know?  

What concerns Trump, as I've said, is the excessively large trade deficit with China. Business as usual didn't work for a number of reasons. Corruption, currency manipulation, the Chinese government support of entire industries, and so on. The system was broken. 

 

And if you look up Navarro, the tariff idea was obviously his. He's studied the matter extensively and he's, written books.  He's long advocated for tariffs as a means of dealing with China. One of Navarro's books, Death by China, co-authored by Navarro and published in 2011, is supposedly one of Trump's favorite books on the China trade problem.  So, well before he was even inaugurated for his first term, Trump must have known how things work.  

 

Trump bought into the idea and here we are.  You can argue all day as to whether or not tariffs are good idea, but that's beside the point. 

[placeholder]

14 minutes ago, jas007 said:

 It's basic stuff.  Sort of like the air we breathe containing oxygen. Trump knows. How can he not know?  

What concerns Trump, as I've said, is the excessively large trade deficit with China. Business as usual didn't work for a number of reasons. Corruption, currency manipulation, the Chinese government support of entire industries, and so on. The system was broken. 

 

And if you look up Navarro, the tariff idea was obviously his. He's studied the matter extensively and he's, written books.  He's long advocated for tariffs as a means of dealing with China. One of Navarro's books, Death by China, co-authored by Navarro and published in 2011, is supposedly one of Trump's favorite books on the China trade problem.  So, well before he was even inaugurated for his first term, Trump must have known how things work.  

 

Trhe idea and here we are.  You can argue all day as to whether or not tariffs are good idea, but that's beside the point. 

How can you not be aware of Trump's fabled and capacious ignorance?  As for Navarro's work being one of Trump's favorites...as his aides have repeatedly said, Trump doesn't like to read. For issues he wants short pithy summaries and lots of graph,. Just because he likes Navarro's conclusions, doesn't mean he has actually read the book.

And since all the actual existing evidence supports the belief that Trump hasn't a clue about trade deficits (it's not clear the most Trump supporters here do either), basically all you're offering is a statement of faith. The faith of a true believer.

[jas007]

4 minutes ago, placeholder said:

How can you not be aware of Trump's fabled and capacious ignorance?  As for Navarro's work being one of Trump's favorites...as his aides have repeatedly said, Trump doesn't like to read. For issues he wants short pithy summaries and lots of graph,. Just because he likes Navarro's conclusions, doesn't mean he has actually read the book.

And since all the actual existing evidence supports the belief that Trump hasn't a clue about trade deficits (it's not clear the most Trump supporters here do either), basically all you're offering is a statement of faith. The faith of a true believer.

 If that makes you happy, so be it.  Just be aware that all you're doing is making yourself look silly.

 

 

[placeholder]

11 minutes ago, jas007 said:

 If that makes you happy, so be it.  Just be aware that all you're doing is making yourself look silly.

 

 

Sure, I'm the one making myself look silly by believing against all actual evidence that Trump understands what deficits really signify.

And you're the one making yourself look serious by invoking evidence that's invisible. And that's why no one ever ridiculed Donald Rumsfeld for claiming that absence of evidence is not evidence of absence.

[jas007]

2 minutes ago, placeholder said:

Sure, I'm the one making myself look silly by believing against all actual evidence that Trump understands what deficits really signify.

And you're the one making yourself look serious by invoking evidence that's invisible. And that's why no one ever ridiculed Donald Rumsfeld for claiming that absence of evidence is not evidence of absence.

You really don't understand, and that's something I can't fix. As the saying goes, "You can't fix stupid." 

 

I'm sure if 1000 economists somehow joined this forum and posted here, they'd tell you the same thing I've been saying.  You can't have the world reserve currency without running a trade deficit.  Everyone knows that, and I'm sure Trump does as well.