Tinder Box re future US economy
Thanks in large part to slave labor wage rates, lax environmental standards, lax worker safety rules, and gov't sanctioned manipulation of the Yuan exchange rate, China has been able to undersell US and other competitors in the US market for years. In the process, the Chinese central bank has amassed over 1/2 a trillion US dollars in trade surplus. Until recently the Chinese central bank has been content to 'park' those US dollars in US Treasury bills - which effectively amounts to owning nothing except a piece of paper which promises future payment from the tax money of US resident's children and grandchildren.
However, the Chinese gov't, central bank, and gov't owned corporations are now attempting to actually use those surplus US dollars in their possession to buy real tangible assets which are valuable to the Chinese (and to others as well) ... most recently the oil and gas reserves of UnoCal Corp by CNOOC (Chinese state oil company). Suddenly the US congress has finally received the 'wake-up call' and wheels are turning to attempt to block the UnoCal sale on national security grounds, i.e. that the USA may begin to be permanently cut off from partaking of those oil and gas reserves if they fall under the control of the communist Chinese gov't.
IMHO the UnoCal matter is really 'small potatoes' in the grand scheme of things. A much larger issue will be the future of the US dollar, and of the US economy in general, if/when the Chinese figure out that the US gov't may only allow them to continue to 'spend' their surplus US dollars on 'worthless' pieces of paper instead of purchasing real tangible assets currently owned and controlled by US interests.
The potential ramifications go well beyond just the economic as well. Consider some possible analogies to 1940ish US-Japanese relations.
Re: Tinder Box re future US economy
Yep - the baby boomers left quite a mess behind them - from obnoxious hippie idealology to the gimme gimme idealology to massive debt to expensive housing to unsustainable fuel to huge taxes (to send to Africa (latest dictator) non-the-less) to moral majority craziness. At least they made computers!
Re: Tinder Box re future US economy
Wow, this board worrying about something besides lowest cost and WalMart convenience...We're all to blame for this mess folks!
Re: Tinder Box re future US economy
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We're all to blame for this mess folks!
True, but if you will forgive me for saying so, some of us are more to blame than others. In other words, those who support union pay rates with little regard for the actual 'value added' produced in exchange for those high pay rates, 'best available technology' environmental compliance with no regard for resulting costs, and strict OSHA safety/documentation standards with no regard for actual safety improvement or resulting costs, have sown the seeds which allow Chinese industries to operate at much lower costs than US industries and thus amass such a huge surplus of US dollars.