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Stop Being Wrong About China Buying Our Bonds

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Re: Stop Being Wrong About China Buying Our Bonds

#131

Post by avn2109 »

JackFr wrote: post #38

As an identity, the capital account between two countries -- payments made for capital: land, buildings, financial assets, etc. must equal the current account payments made for goods and services. When we buy stuff from China, they get dollars. If you have a surplus of dollars you want to invest them in something, and that something has to be dollar denominated. Treasury bonds are safe, liquid and politically palatab…

This is a bit of history which they never mentioned in Econ class. Politically inconvenient for some actors and very interesting.

Re: Stop Being Wrong About China Buying Our Bonds

#132

Post by drcode »

hencq wrote: post #68
drcode wrote: post #33

Here's my simplified way of thinking about it: The Chinese government wants its citizens to be relatively poor. Why? because then it can use them as cheap labor that is a valuable tool to leverage on the world stage. Plus, poverty stifles political activism. How does it keep its people poor? Well, by making sure a USD spent in China can buy 4x as much rice/milk/chicken/etc in China as it can in the US. This will mean…

It is simplified, but it is also wrong. If you're looking for a simplified explanation, the article doesn't do too bad a job. China has lifted over half a billion people out of poverty in the last 30 years. Dismissing that as a side effect of trying to "influence world events" is, frankly, preposterous.

Well, I think the Chinese people are the one who pulled themselves out of poverty, and they did this * in spite of * the government, not * because of * it.

Re: Stop Being Wrong About China Buying Our Bonds

#133

Post by drcode »

skue wrote: post #61
drcode wrote: post #33

Here's my simplified way of thinking about it: The Chinese government wants its citizens to be relatively poor. Why? because then it can use them as cheap labor that is a valuable tool to leverage on the world stage. Plus, poverty stifles political activism. How does it keep its people poor? Well, by making sure a USD spent in China can buy 4x as much rice/milk/chicken/etc in China as it can in the US. This will mean…

> Plus, poverty stifles political activism. Do you have evidence to back that up? I can think of a number of examples to the contrary offhand: The French Revolution was preceded by a financial crisis and poverty, as was the rise of the Nazism in Germany. There's Mohamed Bouazizi, the poor and repressed fruit vendor who helped launch the Arab Spring in Tunisia. And even the Occupy and Tea Party movements that have eac…

Maslow's hierarchy of needs.

Re: Stop Being Wrong About China Buying Our Bonds

#134

Post by nunb »

cs702 wrote: post #76

Step-by-step, in plan English: (1) China sells stuff to US buyers, who pay with US dollars. (2) A US dollar is essentially a made-up financial instrument "backed by the full faith and credit" of the US -- it has value only because US laws make it so -- that is, by government fiat. (3) China could easily sell all those dollars, but if it did that, the dollar would depreciate, making Chinese products more expensive for…

A lot of people understand money today. The Chinese certainly do.

Unfortunately, most of HN doesn't seem to. Moldbuggery is a good introduction.

Re: Stop Being Wrong About China Buying Our Bonds

#135

Post by nunb »

scott_s wrote: post #128
yxhuvud wrote: post #109

Earlier quoted context omitted.

Back to bartering? There have never been a big scale bartering system as they always end up being debt based since that is a lot more convenient for all parts. 6000 Years of Debt is a book that can be recommended for information about that. It is not a very good description of the present, but it captures the past very nicely.

I believe you mean "Debt: The First 5000 Years". I'm still reading it. It's good for understanding these ideas, but it spends a lot of time in the beginning in "the language of debt" and how it relates to religions. That is interesting in its own right, but not why I picked up the book.

yeah, that religious part was a bit far-fetched. (As a hindu/brahmin I LOL'd).

I've read several different theories of money and I don't find the debt vs coincidence-of-wants bifurcation that Graeber alludes to such a big difference in practice.

He pretty much hangs his whole approach off of that, but the two can be reconciled quite easily in my mind.

I wish everyone would read David Graeber (first) and then Detlev Schlichter.

Re: Stop Being Wrong About China Buying Our Bonds

#136

Post by nunb »

Friterie wrote: post #123
21echoes wrote: post #106

Earlier quoted context omitted.

rather than stating the risks/benefits of fiat vs metal-backed currencies as absolutes, how about you address them as they really are? what would you rather have controlling your inflation/deflation rates? the rate of mining of a metal from the ground? or, in the case of the US dollar, a specialist committee controlled by a democratically elected government? (and don't come back to me with bullshit fed conspiracies,…

You're post is incoherent. I'll try to address what I can. You ask what I would have controlling inflation / deflation. The free market is my answer. Study the history of inflation / deflation you will see that almost without exception inflationary shocks are caused by the control of money and its supply by a narrow self-serving elite. You ask what else I would favour when a much better question would be why, based o…

Reflecting on the problems with metals-backed currency (eg FRNs) it's a wonder that nobody thinks BTC is the ultimate form of money.

It's especially a wonder that us hackers don't think it'll work, and that HN is so opposed in general (at least judging by the number of comments against it).

I wonder if this reflects the US-centrism of HN. I believe it's become a lot more popular in Europe (especially Germany, where Satoshi may well have been from).

Re: Stop Being Wrong About China Buying Our Bonds

#137

Post by nunb »

Friterie wrote: post #123
21echoes wrote: post #106

Earlier quoted context omitted.

rather than stating the risks/benefits of fiat vs metal-backed currencies as absolutes, how about you address them as they really are? what would you rather have controlling your inflation/deflation rates? the rate of mining of a metal from the ground? or, in the case of the US dollar, a specialist committee controlled by a democratically elected government? (and don't come back to me with bullshit fed conspiracies,…

You're post is incoherent. I'll try to address what I can. You ask what I would have controlling inflation / deflation. The free market is my answer. Study the history of inflation / deflation you will see that almost without exception inflationary shocks are caused by the control of money and its supply by a narrow self-serving elite. You ask what else I would favour when a much better question would be why, based o…

Your posts are so well-written that I feel compelled to point out these few errata while you may still edit this one post:

- Your post is incoherent.

- why, based on the historical record,

- were relieved of their

- They won the central

- what you're getting at

- , for free,

I actually pointed out the mistakes, then worried that the malformed sentences would remain, and so I've posted the corrections instead.

Also, I think you might be responding to a troll. Or at least somebody with no hope of understanding or redemption, which is almost worse. Sigh, such is HN on matters of inordinate privilege.

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