Trade Deficit
- Thread starter ShoeshineBoy
- Start date
Well, they got a deadline this year. If they let it float the market forces will take it over and the dollar should sink against the yuan pretty quickly. Their central bank wont be able to 'intervene' to hold dollar even if they want to.
Plus the deficit involves a lot of other countries, since 2002 the world message had been that the US wasn't attractive enough in terms of good/services and investments so an adjustment took place
Gotcha. So you're saying import prices would go up which could lead to inflation which could whack the economy?
What deadline are you talking about?
History Lesson 101
I. Reasons why the Berlin Wall was built:
1. Spying activities by the Americans. Hords of spies were able to just walk into East Berlin and then spread all over East Germany. It could be compared to Manhattan being in the possession of the Soviets during the Cold War. Do you think the US would allow free movement between Manhattan and the rest of the US????? So why do you think the Soviets would be foolish enough to just allow CIA to freerly roam East Germany???? Come on think a little bit.
2. Counterfeit currency was transported from the West to destabilize East Germany. Since you are trading, I will not have to explain to you the dangers of having your country flooded with perfectly counterfeited currency printed on the best machines available by your enemy.
3. Constant trickle of East Germans leaving for West Germany. Thanks to generous US economic help which was given to most Western European countries after WWII to stop the local population from electing lefitist governments, the West German standard of living was already higher then in the East. Also what once was East Germany was always less industrial,less developed (by German standards) than West Germany and it was only natural that West Germany would do better right off the bat. Moreover, many Germans that stayed in East Germany were from the territories awarded to The Soviet Union and Poland after WWII, so for them, it was not so difficult to move further west, they were displaced to begin with and once they noticed that life in the west would be easier they picked up again and moved west.
Speaking of walls: the one being build between US and Mexico sure looks interesting. Most Mexican are moving to the US because their country is pure capitalism: no independent unions, gov. lets business do whatever they want, you know typical laissez faire, minimum wage is non existent, education is substandard, very little help coming from the government to the people, you know PURE CAPITALISM. You can open up any kind of business, pay workers $5 a DAY, no health insurance whatsoever, no taxes to pay, no unions, no pension, no job protection, no environmental issues to worry about ... and the end result is....Mexico. So they move to the US where pure capitalism has been replaced after the Great Depression, when the government and the rich elites realized that in order to keep the people from making another Russian Revolution, some social protection needed to be built in, hence you get S.S. and other programs designed to help people.
Also look at West Germany and their social system. They provide a lot more benefits to their poor, and their workers and still or (here is a radical thought) maybe because of those benefits, they produce $150.000 MB cars and have a higher standard of living (in general) than people in the US. END OF THE LESSON
I dont know where you get your facts from. West germany doesn't exist. Germany has a lower per capita income than the US. Higher unemployment. They rank lower in human development index.
As far as mexico is concerned, you say mexico is pure capitalism, yeah right. For example, it takes more than 65 days on average to register a firm in Mexico, compared with four days in the United States.(source dallas fed). The government overloads entrepreneurs with regulation then wonder why they all leave Their education system is also terrible.(A system which is mostly a government monopoly) Their handling of property rights is also awful. Collecting on a bad check takes five times longer in Mexico than in the United States. Resolving more complicated contractual disputes can take several years.(dallas fed)
Since the post I was answering touched upon the Berlin Wall,which was in existence when Germany was divided into West and East. That is why the reference was to West Germany.
If it is so hard and difficult to do business in MX then why are there so many US companies doing exactly that south of the border and I assure you, they are not leaving, quiet the contrary, more and more of them come every year.
Regulations in Mexico? There are not enforced, you can bribe your way out of anything and by the same token, you can get anything done if you grease the palm a little bit.
Collecting a bad check? Most of the transactions in MX is done by bank checks or cash. Most people have never seen a check, much less used it.
Now, all of the above is based on my life experiences in Mexico and not on "dallas fed."
