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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

#271

Post by nine_zeros »

jcriddle4 wrote: post #261
nine_zeros wrote: post #215

Earlier quoted context omitted.

I wish prices were directly proportional to value of currency. But it isn't. In the oil price example, drop in value of USD could cause prices of oil to increase (by how much? We don't know. There are entire commodities industries who hire quants to figure this out every day). Assuming price of oil increases by 10%, price of chicken feed would increase by a%, causing an increase in price of chicken by b%, causing an…

The link below is on historical gas prices. Also include a link on US dollar to Euro. Depending on the state we are currently at about 2.50 and have been over 3.50. The dollar menu going to 5 because of a 10% or 20% drop in currency doesn't seem likely. We, and also other countries, can have fairly big currency changes without much internal inflation or deflation(can depend on country size). A number of countries hav…

Those links don't even go to the dates of US defaults in 70s and 30s.

> We, and also other countries, can have fairly big currency changes without much internal inflation or deflation(can depend on country size). A number of countries have actually deliberately devalued their currency in order to encourage growth.

This is all applicable to the reserve currency or massively exporting countries. Not to importing countries, which the US is. The US cannot stop importing without causing massing inflation at the retail counter. No more $10 t-shirts and $100 sport shoes if they are made here.

I would recommend reading the article to truly understand how subsidized our lifestyle is.

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

#272

Post by simonh »

onepointsixC wrote: post #264
simonh wrote: post #255

Earlier quoted context omitted.

They aren’t slaves, they’re just people extremely happy to get a wage of $10k per year, which would be unobtainable for most of them any other way. The fact that this means they under cut US manufacturing wages by more than half isn’t really their fault. As for bringing back manufacturing home, you need to find two things to make that work. First massive subsidies and tariffs to drive up the cost of foreign imports,…

He's not referring to all Chinese laborers, but Uyghurs who were first sent to re-edcation camps and then sent off to factories all against their will.

A reprehensible and horrific crime for sure, which I don’t want to trivialise, but not an economically consequential one in the grand scheme of things.

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

#273

Post by rpier001 »

AnthonyMouse wrote: post #76
lettergram wrote: post #49

Earlier quoted context omitted.

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. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn…

I wonder if import taxation that reflects externalities (pollution) and costs that we carry to reduce suffering (child labor, minimum wage) would make a difference.

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

#274

Post by umvi »

AnthonyMouse wrote: post #76
lettergram wrote: post #49

Earlier quoted context omitted.

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. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn…

> Some regulations save a thousand lives at a 0.02% increase in costs. Repealing those is bad. Enacting them is good. Some regulations save two lives at a 5000% increase in cost, which could equally be saved by some less expensive regulation. Enacting those is bad. Repealing them is good.

Not to get political but this reminded me of covid-19. Masks and social distancing are an obvious 0.02% increase in costs that save a thousand lives. Lockdowns and extended stay-at-home orders and shutting down businesses so that we start needing to send out trillions upon trillions of stimulus cash to keep companies and people afloat start to cross into "save 2 lives at a 5000% increase in cost" territory

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

#275

Post by mbesto »

jtbayly wrote: post #168
mbesto wrote: post #39

Earlier quoted context omitted.

> the last LCD panel manufacturer in the US closed around then and we could no longer manufacture LCD for our military vehicles And funny enough our gov't (I'll let you guess which political party) struck a deal with Foxconn to produce LCDs in Wisconsin. It has failed miserably: https://www.theverge.com/2020/4/12/21217060/foxconn-wisconsi...

So an attempt was made to bring back manufacturing, and that’s so terrible? Let’s all roll our eyes at the Republicans.

You pretty much just made my point.

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

#276

Post by mbesto »

jtbayly wrote: post #225
GcVmvNhBsU wrote: post #187

Earlier quoted context omitted.

It’s fair to eye roll at ineffective agreements that don’t pan out. Racing to the bottom with tax incentives is not the only way to bring back manufacturing and hasn’t seemed to work when it’s tried.

I don’t mind eye rolling at corporate handouts and deals that are mirages. But the parent comment only seems to be mocking the idea of bringing manufacturing back and saying how dumb Republicans are for wanting to do it.

> mocking the idea of bringing manufacturing back and saying how dumb Republicans are for wanting to do it.

At what point did I ever say Republicans were dumb for wanting it? I'm mocking the idea that Republicans actively denounced corporate welfare (saying it's a Democratic thing), yet just do it themselves (and then fail at actually make the change for that matter).

Take your triggered self over to Reddit.

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

#277

Post by alasano »

MrRadar wrote: post #259
alasano wrote: post #235

Earlier quoted context omitted.

Probably a mix of things. People who appreciated the technology initially but changed their minds seeing it being driven by what people often consider a toxic community who hides behind the pretense of technology to make money. People who think Bitcoin itself, despite the technology, is no good for it's stated initial purpose of being a peer to peer electronic cash system. Whether that's true even with additional lay…

Don't forget another type (of which I count myself among): those who think "proof of work" cryptocurrencies are an environmental disaster. Recent estimates place the energy used to mine Bitcoins at around the same as the entire energy use of Switzerland[1] and as each new generation of miner is created the previous generations become mountains of e-waste. [1] https://www.bbc.com/news/technology-48853230

Indeed! Very common as well, thanks for the reminder.

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

#278

Post by jayd16 »

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…

Tariffs just cause US buyers to pay more without much help. Tariffs have no way to make a US manufacturer competitive globally. US made goods would just be that 25% more expensive. At its best its a regressive subsidy from one set of Americans to another.

Why not just a direct subsidy to US manufacturing under the usual tax code?

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

#279

Post by tekknik »

AnthonyMouse wrote: post #76
lettergram wrote: post #49

Earlier quoted context omitted.

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. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn…

I agree with you, but one point is (and clearly these are not accurate numbers you posted) these 0.02% cost increases add up. One regulation may only increase the cost 0.02%, but 1000 at the same industry increases it 20%. And all of them increase the cost of entry. If you increase the cost of entry, then you’ll get less competition as smaller business that could turn into flourishing enterprises simply never take off or even get started because someone in their garage can’t find a profitable path. Or afford a lawyer to explain the legal hoops you have to jump through. Recently I was quoted $10k to have a lawyer explain to me 2 points about importing liquor. The result, I didn’t start the business. This is more of a problem IMO

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

#280

Post by tachyonbeam »

te_chris wrote: post #206
tachyonbeam wrote: post #202

Earlier quoted context omitted.

Tesla is trying to do exactly what you describe. Build "the machine that builds the machine", as Elon Musk would say. I agree with you that trying to compete on low-cost, low-margin is a race to the bottom. We could conceivably bring manufacturing of iPhones back to America. I would also imagine that manufacturing of silicon is largely automated, so the US could try to build the best fabs.

Tesla has done some reverse Chinese equity investment swap thing and is now at least somewhat a Chinese company building manufacturing capacity and innovation in EVs. Musk is a lot of things, and one thing is clear: he’s an opportunist more than a US economic nationalist. He will not be the saviour of American industry.

Please clarify what you mean by "Chinese equity investment swap thing".
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