GOP To Fed: Let Economy Fail SO WE CAN WIN.

[jem]

Quote from Free Thinker:

why would a company want to move a factory to a strong currency nation and try to export back to a weaker currency market? it would make their good non competitive. when you educate yourself about that question you will have your answer.
companies are moving factories because of labor rates not because of currency. what you claim makes no sense.

you do not understand how todays world works, you are stuck in the democrats bretton woods world view.

Because of global markets.... the inputs go up in cost for just about everything in the weak currency country... everything gets more expensive keeping the exporters good at the same relative value vis a vis most goods in the weak currency country.

Business are looking for places where profits can be forecast. Not places looking to tax and regulate the crap out them as the govt debases the currency.

 

[nitro]

Quote from Free Thinker:

republicans are more than willing to tank the us economy to ensure their victory in the next election. actually its their plan:

GOP To Fed: Let Economy Fail

The headline above is not what GOP congressional leaders actually said today to Federal Reserve Board Chairman Ben Bernanke, but they might just as well have used that precise language in the letter CNBC reports they sent to the Fed. According to CNBC, the letter instructed the Fed "to refrain from further 'intervention' in the economy.

In other words, now that the GOP has made it all but impossible for fiscal policy to be used to improve they economy, they want to make sure that the only other tool the government has at its disposal -- monetary policy -- isn't used either.

http://capitalgainsandgames.com/blog/stan-collender/2372/gop-fed-let-economy-fail

My dad believes exactly this. He believes that Obama is being sabotaged on purpose as a moral imperative, in some cases even by his own lieutenants. I find it hard to believe, but I don't put anything passed these people anymore.

This book details much of this:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=227419

Shame.

 

[trefoil]

Quote from jem:

you do not understand how todays world works, you are stuck in the democrats bretton woods world view.

Because of global markets.... the inputs go up in cost for just about everything in the weak currency country... everything gets more expensive keeping the exporters good at the same relative value vis a vis most goods in the weak currency country.

Business are looking for places where profits can be forecast. Not places looking to tax and regulate the crap out them as the govt debases the currency.

Evidence instead of anecdote:

1 - Top left: Industrial production has been rising since the recession ended.
2 - Bottom left: Exports are up and are higher than they've EVER been, not just since the ending of the recession.
3 - Top right: private employment is up since the recession ended.
4 - Bottom right: but gov't employment is down sharply and continues to slide.

The private economy is doing OK, and exports are doing very well. The sogginess in employment is due to gov't cutbacks.
There is zero evidence here that a weaker dollar is causing anything like what you keep ignorantly insisting on. The thing you would expect to see, rising exports, is the thing you in fact see. When, of course, you rely on evidence rather than anecdote.

 

[jem]

actually those are things you would expect to see with a weaker dollar.

In the short run things that were made while inputs cost us less will appear as good bargains to outside nations. So a debased dollar will lead to increased exports at first.

I will think about your point over lunch.

 

[jem]

I just reread this...

Nothing in your charts contradicts my point.
No doubt a lower dollar would increase exports.
I have argued that on et for years that China rigged the currency markets and we should not feel sorry if their hoarde of dollars is debased.

However, if you are trying to get companies to create new businesses and new jobs there is no doubt they need to see a chance for profit.

If your govt is recklessly spending what you do not have, and your Central bank is debasing your currency, people are not going to invest in industry in your country.

I ask you once again would you make a 20 year investment in a country which was debasing its currency.

I am still waiting to see the liberal logic. There are answers.

Perhaps you would argue that you would invest in gold mines and raw material companies.

But, would you invest in green technologies or chip processing plants... things which take tremendous capital outlays.


Would you want your future profits to come back in dollars which were 20% percent less valuable? Would you want to pay higher taxes on those profits? Would you want to be at risk of paying much higher health care costs? And perhaps paying massive carbon taxes?

Please do explain.