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The fraying of the U.S. global currency reserve system

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Re: The fraying of the U.S. global currency reserve system

#51

Post by romanoderoma »

vinniejames wrote: post #30
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

This is 100%, the fact the US can barely manufacturer face masks during a global pandemic is embarrassing. On the other end, how do you compete with slave labor in the Chinese factories?

On the other hand Apple (to name one) piled an enormous amount of money thanks to slave labor in China.

Paying peanuts in taxes

How Apple avoided paying $40 billion in taxes

https://fortune.com/2018/01/18/apple-bonuses-money-us-350-bi...

Maybe the State could tax products manufactured abroad at 50% no matter where they keep the money.

Using the simple formula: units sold * profit margin per unit * 50%

Re: The fraying of the U.S. global currency reserve system

#52

Post by renewiltord »

vinniejames wrote: post #30
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

This is 100%, the fact the US can barely manufacturer face masks during a global pandemic is embarrassing. On the other end, how do you compete with slave labor in the Chinese factories?

Shenzhen factory labour is more expensive than America. The labour is higher quality, though.

Re: The fraying of the U.S. global currency reserve system

#53

Post by [deleted] »

aazaa wrote: post #6

> More troublesome, the inherent flaw of having the global reserve currency, in a theme that goes back to economist Robert Triffin from over half a century ago, is that in order to maintain the global reserve currency, the country must supply the world with its currency via structural deficits in one form or another. That "structural deficit" means allowing manufacturing to move overseas. The trade war is a distracti…

[deleted]

Re: The fraying of the U.S. global currency reserve system

#54

Post by tharne »

aazaa wrote: post #6

> More troublesome, the inherent flaw of having the global reserve currency, in a theme that goes back to economist Robert Triffin from over half a century ago, is that in order to maintain the global reserve currency, the country must supply the world with its currency via structural deficits in one form or another. That "structural deficit" means allowing manufacturing to move overseas. The trade war is a distracti…

> Holders of bonds would be absolutely wrecked.

That's a lot of institutions and wealthy individuals. That's also a lot of people with 401k's, college savings for their kids, pension funds, and non-profit endowments.

I have a feeling that most wealthy individuals and institutions will be just fine, it's the little guy and middle class families that will feel the pain, as usual.

Re: The fraying of the U.S. global currency reserve system

#55

Post by aquaticsunset »

renewiltord wrote: post #52
vinniejames wrote: post #30

Earlier quoted context omitted.

This is 100%, the fact the US can barely manufacturer face masks during a global pandemic is embarrassing. On the other end, how do you compete with slave labor in the Chinese factories?

Shenzhen factory labour is more expensive than America. The labour is higher quality, though.

Got a citation for this?

Re: The fraying of the U.S. global currency reserve system

#56

Post by alex_anglin »

lettergram wrote: post #49
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

Competing in a race to the bottom ought to beg the question about what alternatives and options are. Focusing on efficiency and quality are two examples that would probably be a better long-term bet, with fewer negative secondary effects.

Re: The fraying of the U.S. global currency reserve system

#57

Post by ikiris »

CuriouslyC wrote: post #28
aazaa wrote: post #6

> More troublesome, the inherent flaw of having the global reserve currency, in a theme that goes back to economist Robert Triffin from over half a century ago, is that in order to maintain the global reserve currency, the country must supply the world with its currency via structural deficits in one form or another. That "structural deficit" means allowing manufacturing to move overseas. The trade war is a distracti…

Inflating the dollar is probably the only way we're going to get out of the hole we're in, so that'd kill two bird with one stone.

Suicide is an solution, but it's not a very recommended one.

Re: The fraying of the U.S. global currency reserve system

#58

Post by ehvatum »

CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

Consider Elon's move from California to Texas. His energy costs are vastly reduced, expenses generally are reduced, and he can continue to hire directly in the US and draw directly on US machine shop production capacity.

There should be more machining and making in the US; everyone would like to have solid US-made hardware, but success in small-business machining and manufacturing, and scaling to large scale without off-shoring, requires a discipline and commitment to self-improvement that is difficult to cultivate.

Re: The fraying of the U.S. global currency reserve system

#59

Post by claudeganon »

lettergram wrote: post #49
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

> To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade.

No, you just have to do what China (as well as countries like Germany and Japan) do and have the government subsidize preservation of the industrial base. Screwing over workers gets you nowhere but further populous unrest and social decay.

Re: The fraying of the U.S. global currency reserve system

#60

Post by omgwtfbyobbq »

hedora wrote: post #26
User23 wrote: post #22

Earlier quoted context omitted.

Trump was the first president in my lifetime to even admit gutting our manufacturing base is a problem. Neither Democrats nor establishment Republicans did anything but line up for their shockingly paltry share of the loot while mouthing platitudes about efficiency.

True, but he said he said that simply because Bernie did, and it played well against Hillary in the primaries. He didn’t do anything that actually slowed the loss of our manufacturing base while president.

He ended up reversing the steady gain we've had in manufacturing jobs since 2010, albeit indirectly, because he botched the response to covid.

https://data.bls.gov/timeseries/CES3000000001

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