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Thread: please sent US Senators to take 'Global Economics 101' ...

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    Default please sent US Senators to take 'Global Economics 101' ...

    ... before they start another 'great depression' ...



    (snip)"The measure would apply "to any trading partner with (an) out-of-whack currency," Grassley said. And because many of the bill's punitive measures don't kick in for six months or a year, "It's a velvet glove with a steel fist inside," he added.

    The vote comes before Treasury Secretary Henry Paulson travels to Beijing next week to discuss the currency dispute and other economic issues, such as product safety.

    The Treasury Department issued a statement saying it recognizes Congress wants to send a strong message but it believes "direct, robust discussions with the senior Chinese leaders, not legislation, is the best means of achieving progress."

    Sen. Maria Cantwell, D-Wash., was the lone committee member to vote against the bill, which she said could spark retaliation by China, resulting in "unintended consequences" for U.S. companies and consumers. She wants the U.S. to press China to make legal reforms and improve its intellectual property protection, a key issue for Microsoft Corp., located in Redmond, Wash.

    Several bills were introduced this year aimed at punishing China and other alleged currency manipulators. Business groups representing manufacturers such as General Motors Corp., Honeywell International Inc. and General Electric Co. say anti-trade sentiment in Congress is strong enough to override a likely presidential veto of a currency bill.

    The measure approved Thursday does not specifically mention China and is not as punitive a bill as the proposal before the Senate last year that would have imposed an across-the-board tariff on Chinese imports.

    Baucus and Grassley introduced their bill last month, after the Treasury Department refused to cite China as a currency manipulator in a semiannual report to Congress.

    U.S. manufacturers and many members of Congress say that China keeps its currency, the yuan, undervalued by as much as 40 percent against the U.S. dollar to gain an unfair trade advantage. The cheaper currency means that China's exports to the United States are less expensive.

    Sen. Charles Schumer, D-N.Y., who sponsored legislation last year with Sen. Lindsey Graham, R-S.C., that would have slapped a 27.5 percent tariff on Chinese goods, helped develop the Baucus-Grassley proposal.

    "Our objective this year should be to pass the strongest possible bill we can with the largest possible vote that we can," Schumer said."(snip)

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    Default Re: please sent US Senators to take 'Global Economics 101' ...

    I agree that these meddling Senators don't really know what they're doing...BUT...we (and the rest of the world) need to be sending a stronger message to China about it's trade practices...and not only that, but also I'd like to include their civil rights, environmental issues, and labor practices in discussions about trade. They are getting away with murder and no one is calling them to the carpet about any of it.

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    Default Re: please sent US Senators to take 'Global Economics 101' ...

    WE don't need to send china any messages politically.

    If china wants to rob their own citizens via inflation to subsidize us, we should thank them. China inflates their yuan based on their US security holdings anyway, so the best way to reduce the chinese inflation is for our own government to stop issuing bonds that the chinese buy. What did Jesus say about the splinter in your eye but the beam in mine?

    Leave me out of your crusading against China please.

    The US gov gets away with murder all the time, fix your own government first before you go reprimanding the Chinese.

    Political sanctions against them will just cause resentment, probably HURT the oppressed in China, and would only make us poorer over here as we have decreased relations with them. If you want to organize a boycott, have at it. But let's not get our ham fisted political machine involved in it.

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    Default Re: please sent US Senators to take 'Global Economics 101' ...

    Well then, glad you got that off your chest.

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    Default Re: please sent US Senators to take 'Global Economics 101' ...

    again I was trying to stay away from the political aspects and focus on the financial aspects of any such move by the US congress. Arguably, the two most 'manipulated' currencies are the Yuan and the Yen. I really don't want to think too hard about the 'unintended consequences' of a 20-30% increase in the value of the Yuan and the Yen versus the US dollar, but I guess there is little choice.

    Since Iran and Russia are already selling oil priced in Yuan and Yen and other currencies, a 20-30% increase in the Yuan and Yen would instantly translate into a 20-30% increase in the price of oil in terms of US dollars

    A 20-30% increase in the Yuan and Yen would quickly translate into a 20-30% increase in the price of products imported from Japan and China. Since US industry has in many cases shut down and dismantled industrial capacity capable of making competing products, items like TV's, computers, blue jeans, shoes, hell you name it, will continue to be imported but sold at 20-30% higher prices. Corporations may want to modernize shut down US industrial capacity to compete with such imports again, but they will have a great deal of difficulty doing so since the capital for new business loans must primarily be raised from foreign investors (who would very likely say NO to the idea of loaning money to help a direct competitor !!!) because Americans don't have any savings to speak of for American banks to loan out.

    IMHO any such move on the part of the US congress will quickly translate into US price inflation ... with little or no US wage inflation to match. Any such move would also increase operating costs thus lower profit margins for lots of other US businesses which depend on current oil prices and low cost materials and/or components imported from China to keep their businesses viable.

    It's time to acknowledge that the US economy is no longer a 'complete circle' as it was in the 1930's and 1960's and arguably still was up until the mid-1970's. American industry no longer has the capacity to produce everything that Americans need/want to buy. Thus, whether the fact is acknowledged or not, Americans cannot get sufficient food or sufficient clothing or sufficient 'staples' without de-facto converting their US dollars to Yuan or Yen and buying these things from Chinese or Japanese sources. Because of recent actions by Iran and Russia, the once US dollar dominated world oil price is now also increasing independent, thus the US dollar price of oil is increasingly affected by the relative valuation of the US dollar vs other currencies ... and America obviously has to buy an incredibly large amount of oil from foreign suppliers.

    Thus 'Bread and Circuses' could arrive very quickly if this congressional proposal were to become reality.

    ~
    Last edited by Melonie; 07-28-2007 at 04:09 AM.

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