A new capitalism will emerge from the current crisis...

mewbie_2

Well.. I was thinking about the car industry - Morris Motors / Leyland - the coal industry - steelworks - that sort of thing. But hey - we sure have a lot of media studies these days.

WTF?_2

setmefree2 wrote: »

Theydidn't just buy T bonds - they bought debt issued by Fannie & Freddie, corporate bonds, residential mortgage securities and CDOs.

It was the massive trade imbalance that allowed them to buy all this debt from the US, and the trade balance was caused by the fixing of exchange rates.

Every country that has power over its currency's interest rates 'fixes' their exchange rates to a target range which they decide offers the best advantage to their economy

The trade imbalance was mostly caused by the fact that labour in the developing world is incredibly cheap and the embracing of globalisation by Western corporations to take advantage of cheap production in the East.

pickles110564

Several chinese factories have not open back up after the games and today heard that one large one has just gone bust.

setmefree2

!!!!!!? wrote: »

Every country that has power over its currency's interest rates 'fixes' their exchange rates to a target range which they decide offers the best advantage to their economy

The trade imbalance was mostlycaused by the fact that labour in the developing world is incredibly cheap and the embracing of globalisation by Western corporations to take advantage of cheap production in the East.

The Chinese Authorities kept the value of the yuan intentionally cheap relative to other currencies such as the US dollar to promote exports from their country. This is a fact.

Even since the summer of 2005 when the Chinese were forced to let their currency apreciate slowly it still is estimated that Chinese currency remains undervalued by 20-25% against the dollar.

Why are you defending such a policy when you are always complaining that we don't produce anything? We can't produce anything when a country the size of China has such an unfair advantage.

Goggle this and you wil see that this is a statement of fact.

It would appear that "the let nature take it's course" philosophy that you espouse only holds for anything to do with house prices and that damages the UK or US economies.

setmefree2

pickles110564 wrote: »

Several chinese factories have not open back up after the games and today heard that one large one has just gone bust.

The Chinese are sufferin. They need to develop their own internal markets. They are over-reliant on exporting. Furthermore, they need to open those markets up to the rest of the world and they need to have a floating currency so that everyone can compete equally in those markets.....IMHO;)

neverdespairgirl

Primrose wrote: »

And growing more of our own food too, instead of importing, We had to do it during the last war. I think there are some lessons to be learned from history. Pity nobody studies it in any depth at school these days !! Or if they did, they've forgotten all they learned.

Speak for yourself, I did history GCSE, A level, history of English law for my degree, and history of western european law for my master's degree!

If anything, I think we probably produce more food now than we did in the 1940s. I'll have a dig around.

neverdespairgirl

The UK produces more wheat, barley and oats than it consumes:

Net exports of both wheat and barley total around 4 million tonnes annually and provide a balance of trade surplus of approximately £300 million.

and imports fruit, veg, sugar, and oils

http://www.ukagriculture.com/farming_today/self_sufficiency_and_crops.cfm

The UK is now less dependant upon agriculture as a % of GDP than any other major nation, a statistic reflected in its inability to feed itself. Self sufficiency in indiginous feeds is less than 80% and for all foods nears 60%. As yet, the decline in overall self sufficiency is not seen as an issue of strategic concern by UK policy makers.

Here is a historic comparison - we produce a significantly higher percentage of our own food than we did in the 1930s and 1940s, and have a much higher population to boot:

Approximate British self-sufficiency over different periods

pre – 1750 around 100% (in temperate produce)

1750 – 1830s around 90-100% except for poor harvests

1870s around 60%

1914 around 40%

1930s 30 - 40%

1950s 40 - 50%

1980s 60 – 70%

2000s 60%

http://www.arthurrankcentre.org.uk/projects/rusource_briefings/rus07/445.pdf

purch

Every country that has power over its currency's interest rates 'fixes' their exchange rates to a target range which they decide offers the best advantage to their economy

Attempts to fix their currencies exchange rate, would be a better way of putting that I believe.

Of course there are many reasons for the huge trade imbalance the World has with China, but you cannot deny the fixed and too low exchange rate is not a huge factor in this. (well you can of course, but I wouldn't agree with you)

Generali

purch wrote: »

Attempts to fix their currencies exchange rate, would be a better way of putting that I believe.

Of course there are many reasons for the huge trade imbalance the World has with China, but you cannot deny the fixed and too low exchange rate is not a huge factor in this. (well you can of course, but I wouldn't agree with you)

And the banking system being used for political rather than financial goals.

setmefree2

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2v.AWwaVpj8&refer=home

Quote
China may keep cutting interest rates, add to a 4 trillion yuan ($581 billion) spending plan and stall gains by the yuan against the dollar to help exporters and stimulate the economy.

The yuan’s biggest one-day decline in three years on Dec. 1. prompted speculation that China may allow its currency to depreciate, helping exporters by making their products cheaper in overseas markets.
The yuan may weaken as much as 10 percent against the dollar, Morgan Stanley said last week.

END QUOTE



The Chinese are not helping. I'm not blaming them, of course, we are all in this together. I just don't think this helps anyone IMHO. Furthermore, such a devaluation is going to add yet more deflation to Western Economies.