Thursday, April 13, 2017

Trump agreed China is a good guy

Trump must have some negotiations with China. How can you turn around 180 degrees that fast? Actually it is a good thing. Both countries need each other.

ALL countries manipulate their currencies. In addition, all countries subsidize their industries. It is just more political than economic.

In one hand, you want your own currency appreciate so you can spend less in importing goods from foreign countries.

However, it would be harder to sell (in addition to losing jobs) your products to foreign countries. It is important for China as it is export-oriented (but changing to internal- or consumer- oriented). When most of your profits are obtained from foreign countries, your profits would be reduced after converting them back to the stronger USD.

A lender would benefit from receiving dividends and loans from a stronger USD like China.

No comments:

Post a Comment