Wednesday, May 9, 2012

Our trade with China

Free trade has its benefits and some minor disadvantages (less jobs to our workers for example). You do not want to grow sugar cane in Alaska. Chicken feet are delicacy in 
China, but not fit even for our cattle. 

However, we have to ensure both partners play fairly. If China dumps the products to force our shops to close and then raise prices, then we have to step in. We are subsidizing our industries like free research and farm loans, so it is quite hard to argue that China subsidizes their industries.

When China offers the cheapest and the best product, our consumers win. When China makes money on the low-end products, they may have money to buy our more expensive products, farm products...
 

China buys our debts to stimulate buying their products so to keep their workers working. The debt obligation is less when we devalue our own currency - actually we're the currency manipulator while China just tags to our currency for now.

We need to limit our spending, both the government (on wars...) and consumers (on big houses...). The logic is so simple that even I can understand - I never took any economic class. 


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(c) TonyP4 2012. Written in 5/09/12. Last updated in 5/09/12.

Disclaimer:

Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision. 

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