Bernanke and Trade Defecit

Quote from maxpi:

Bernanke on the trade imbalance is reminding me of Obama on Iraq, both seem a little pollyanish. Obama says "Iran needs to step up to the plate and take some responsibility for Iraq".... HUH??? Bernanke says "can't we all just get along?"

Europe has never had a trade imbalance with Japan, a good example of how to handle the situation. For every Euro of goods coming in a Euro of goods goes out, screw it, let the balance or imbalance play out in another area, like quality of goods. With the US policy it's cheap junky, even poisonous, goods flowing in and services flowing out, it sucks.

I don't think Americans understand quality that much. The cars are big low quality items, most of the stuff on store shelves is low quality, including the food, they just don't get the quality thing at all. We fought for decades just to have foods labeled with ingredients and 5 out of 6 don't read it... I worked for a German company that was taken over by a cheapshit American corporation, lots of the workers didn't see the difference when the benefits were cut and the wage rises curtailed. I could not understand it but lots of them just could not discern the difference...
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That's very true except, in my opinion, for cars. Many Americans that I know will only buy Japanese because of the high quality.
 
We have a 60,000 page tax system designed to tax (which is the same as discourage) work, and reward both debt and outsourcing.

It worked.

If we are to avoid a total collapse, we need to produce and sell to the world at least as much as we consume.
 
Quote from ShoeshineBoy:


Savers save no matter what the taxes are and spenders spend no matter what (even if they have to pay 21% credit card interest and sell the wife a couple of children into slavery).

Or am I missing something here?
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I disagree, people do what's in their best interest, and spending is the path of least resistance and has been for years. This country was built upon immigrants that saved only to give their wealth up to the next generations that have seen the advantages of deficit spending (debt). Hmmmm, sounds a little like our government. We have a government that says we should be saving while they do the spending (the government knows how the spend better,don't you know that? heavy sarcasm there).

There's a lot of factors at play including globalization, the conundrum of thrift (which the Bernanke is alluding to) and currency issues; but at the end of the day, current economic policies tell us to keep spending and it will be okay. If Bernanke is serious about what he's saying, then I think he just tipped his hand that .25bps is going to be it and maybe it for a while.

Who cares if the titty babies have piled into treasuries, good companies will still produce profits and bad ones will go under. There will be too much value in the markets eventually to stay in treasuries for too long, and those with good credit will still be able to borrow. The current market situation must work itself out "naturally", to the extent that it can.

Savers would then be allowed to have their day with a Fed out of the spotlight to some degree. Look the spenders have been bingeing and leveraging, after I binge I have to let my body recover through a little less activity and rest. Since we seem to think this Fed's going to choose the "Hair of the Dog" form of recovery, we'll just have to wait and see how big of a shot it's going to pour for itself.
 
I agree that we need to change our laws/policies and saving should be encouraged in every reasonable way possible.

But here's my question:

I know, for example, that some of the Asian cultures save to a fault. But is that because of their tax set up and monetary policy or just because it's a cultural value?
 
Japan is about the most Nationalistic... they dont allow immigration and you cant apply for citizenship

They as a rule, are savers and will accept 0.5% yield and pass up US Treasuries

maybe WWII hold overs have an effect.....

but I have to hand it to them, they will own the West before this is all over.... and we'll all be renters
 
Quote from ShoeshineBoy:

I agree that we need to change our laws/policies and saving should be encouraged in every reasonable way possible.

But here's my question:

I know, for example, that some of the Asian cultures save to a fault. But is that because of their tax set up and monetary policy or just because it's a cultural value?
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In China they save 50%. Here in the U.S., anyone that makes any money pays 50% in taxes, if you add all the taxes together, so it would be virtually impossible to save 50%.

The problem is we tax savings, investment, and work instead of debt and consumption. The results should be no surprise given what we are encouraging vs what we discourage. The system needs to change radically if we expect the result to change radically.
 
Well, this is not really about owing the west of anything. People save because they feel insecure. If you are thinking that you can only count on yourself when : you are old, natural disaster hit, disease, war or conflict on home front...etc... You will save. If you see your grandparents getting screwed by the government, you will count on yourself more.

I think in U.S. People trust the government more, but the edge can cut both ways. Now, you have a government's spending habit which reflect the average American. A.K.A., give it to me now and let our children deal with the problem.

Or.....

Average American just don't have good financial sense.
 
Quote from thriftybob:

In China they save 50%. Here in the U.S., anyone that makes any money pays 50% in taxes, if you add all the taxes together, so it would be virtually impossible to save 50%.

The problem is we tax savings, investment, and work instead of debt and consumption. The results should be no surprise given what we are encouraging vs what we discourage. The system needs to change radically if we expect the result to change radically.
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Are you telling me that in China there are virtually no taxes?!? I don't mean to sounds skeptical, but socialist/communist and low taxes just don't seem to go together...

Tell me more.
 
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