Since there is significantly less currency existing than there is money represented in bank computers by series of bytes, what are those goods and actual assets exactly?
Uh, the dollar is worth more now than it was a year ago. Having large cash reserves (which the Chinese do - something like a trillion dollars) is a good thing right now (measuring it in Euros)
Yes everyone else is printing money too, sadly in an attempt to sustain the US economy. But you have rallies in bear markets. And the dollar is long term trending down, and with the Fed and Treasury conjuring money out of thin air on a daily basis it will continue to do so.
I agree the dollar just bounced, in a huge way. Offload your US dollars while they are worth something.
Okay, that's a fairly ridiculous statement. You're probably talking about the personal savings rate.
Those personal savings are the underlying source of capital investment. Yes big companies have big cash reserves (in some cases), but that's one shot stuff. If the populace isn't saving then there's no new capital for investment (well companies can horde instead of paying dividends to their owners, but that makes things worse since you end up with the available savings stuck in businesses that don't use it efficiently).
That's how the capitalist system is supposed to work. People save money, and want to invest it to get more money. Other people borrow that money promising to pay it back with interest, and use it to invest in business capital which will then generate enough profits for them to make the repayments. And the cycle goes around and around. It broke in the US, because the populace stopped saving and instead borrowed money to buy consumer goods - that money was no longer available for capital investment so it's a double hit. The consumers now have to pay back more money than they spent, and businesses didn't get to invest that money into things which generate more wealth. And both consumer and business borrowings were often sourced from foreign savers, which means the interests payments are a drain on the US economy rather than providing more savings for future investment.
It broke in Japan in the opposite fashion, businesses stopped investing in business capital no matter how low they set interests rates... At least in that case they finish up with savings which helps kick start things easier later (unless of course you loaned those savings to the US consumer who has no intention of ever paying it back).
And GMs $20 billion of cash is so great they are borrowing billions directly from the Federal Reserve. Of course they lost $15 billion last quarter, and have been burning through those cash reserves at $1 billion a month...
But it isn't US companies that are the real problem. It's the US consumer - who can't both repay their debts and consume. US exporters will do fine (once the dollar gets to reasonable levels so they are competitive with China).
If you price them cheap enough you'll sell them, that's what collapses the dollar.
We'll trade you this $1 billion US dollars for $2 million euros? No? $200,000 euros? OK! Flood the forex markets with market sell orders, until the dollar is literally worth nothing - because as you say no one will buy them.
Or they just flood them back into the US buying up US equities as fast as they can, and when the US government bans them from that bidding up the price of US exports (which will be great for exporters, not so great for Americans who now can't afford bread because all the American grown wheat is being sold to China at 20 times what American's can afford). That is what will restore the US in the end, once the US dollar collapses and the US becomes competitive again - it's just a painful experience to go through.
That drives up inflation which has the same end game. Note that foreign governments buying up US assets is what's propping up the US stock market at the moment - also note they are demanding and getting huge preferred dividend payments, draining more capital from the US.
For the treasuries, if the world stops buying them the US can't roll over its debt and won't be able to pay back the ones expiring. So it either defaults or prints money. Both of which send the dollar even further down. Plus if China is selling treasuries at 50c on the dollar, good luck to Treasury trying to sell new ones.
The US has managed to put an enemy state in a position where it can overnight collapse the US economy (collapsing its own as well - so we're back to cold war style MAD though financial is better than nuclear for the rest of us).
At some point China wakes up to the fact that it is getting the raw end of the deal. Probably sometime after the US really goes for broke printing money. Yes China loses big time, but the sooner they cut their loses and bail out of their US dollar holdings the better off they will be.
Since they don't really car so much about the next election, they can actually make the short term sacrifice for long term gain that US politicians can't.
Note, that a rapid conversion of production for exports to production for domestic use has already happened in the last hundred years. At the end of WWII the US shifted it's economy from producing war machinery - which is essentially an export since it is shipped overseas and usually doesn't come back since the bullets are used and the tanks blown up, it certainly isn't consumer by the domestic populace - to domestic production. And the result was a economic boom the likes of which hadn't been seen since the industrial revolution. With standards of living shooting up.
China can do the same thing, probably even better since there's no retooling needed - the factories are already producing consumer goods instead of bullets (though they do seem to use the same amount of lead...)
The Chinese market would implode and the country's newly revived economy would go into the shitter. I think you underestimate how important America is to China.
So how is shipping goods to the US different from the dumping them in the ocean? All sending them over to the US does is cause dollars to be sold by American importers to pay the Chinese exporters, then the Chinese government has to sell some of it's yuan in order to buy US dollars in order to keep the exchange rate "semi-pegged", and then buy some treasuries with those dollars.
So what is the difference with the Chinese government directly giving those yuan to the chinese exporters (buying the crap) and then dumping it in the ocean?
The point is China doesn't gain anything from this trade, except for US dollars - which it is becoming pretty obvious are worthless IOUs from a country on a downward spiral.
And capital to build the factory, and engineering to design the plants and items. If it became cheaper in the future to build TVs in America, then we could build factories here in a relatively short period of time.
It's mainly American and Japanese engineering and capital.
America doesn't have any capital - the savings rate is negative. In order to build a factory in the US money needs to be borrowed from abroad. China on the other hand has huge amounts of savings to invest - as does Japan.
So yes factories can be built in America - they likely won't be built by "us" though, since foreigners will have to provide the capital.
What do you think happens if tomorrow China sells all its US dollar reserves to buy yuan or euros or whatever? And sells it's US treasury holdings as well?
Yes, China loses a stack of money - since the value of those two things plummets. But they must know by now that those things aren't worth so much anyway - and being first to cash out is a big win.
The US collapses the next day. Since oil is now $10,000 a barrel (or 80 euro), food is equally too expensive to afford.
Of course the US might just decide to go to war over such a thing, but the military is stretched pretty thin already, and they'll have to be paid in something other than US dollars...
What would the difference be if instead of shipping those goods to the US, China instead dumped them in the ocean?
The US wouldn't have those goods. And china wouldn't have yet more IOUs from the United States. We pay them with dollars, they exchange them for treasuries (or equities when we let them) in order keep the yuan artificially low.
I think the Chinese could do without essentially worthless IOUs (like the US can afford to pay its debts) a lot more than the US can do without imports (of clothes, food, etc, etc).
And of course China doesn't have to dump them in the ocean, they can sell them to their own people - who will be much richer than Americans once their currency stops being artificially surpressed.
Of course there's plenty of pain in the middle - but since the US is about to have a very severe recession these events might be forced on China anyway.
Surely you can see that the consumer half of the producer/consumer relation is the less important half. Anyone can buy and watch a TV, it takes actual industry to be able to make one. Chinese people can start consuming much more easily than American people can start producing - if that trade stops.
You're in for a shock. The end result of the current financial problems is China waking up to the fact that it doesn't need to lend the Americans money so they buy its crap - its own consumers can instead of saving money to be loaned to Americans, buy crap themselves.
Yes, the Chinese economy is going to collapse along with the US economy.
However, they have the production base (that America shipped over there...) and a large population, and India is a big importer of Chinese goods already.
The US has consumer debt with no capital investment to show for it, crumbling infrastructure, and a production base smaller than it once was.
Also, when it comes to poor people rioting and killing the rich people and destroying yet more infrastructure - China has more experience with dealing with that (in a way one would hope America wouldn't deal with it).
So China will recover faster, and will be the new engine of the world economy - both production and consumption...
The US is a drain on the world economy (that's what a trade deficit is - historically you ran a trade deficit in order to invest in capital works, so you could pay the money back later, the US has instead invested in flat screen TVs and vacations), the sooner it is cut off the better for the rest of the world.
Yes, short term is will tank the whole world economy - but it has to be done at some point. And right now there's enough motivation to pull the trigger - it's pretty obvious that money loaned to the US isn't getting paid back with dollars worth anything close to what the ones loaned were worth.
If you are talking about non-US locations then don't say "in the US", since everyone else will assume that when you do you are making a statement about things "in the US".
Oh yes, because you just pour one into other and boom plane ending explosion!
Oh wait no it doesn't, you have to mix them slowly drop by drop and manage not to be overcome by the fumes and then wait a few hours and then you have your explosive. Or do it quickly and have about as much explosive potential at setting your laptop battery on fire.
Except that the whole idea of the "can't bring a bottle of water" through security is because the terrorists were using magical liquid explosives that can't be detected.
nitroglycerin is a standard nitrogen explosive and hence detected by standard detectors. And one would hope the plan to stop the terrorists didn't involve the security people throwing containers of nitroglycerin into bins in a crowded security bottleneck.
A bottle of "spring water" does not have all the water in the spring, just as much as will fit in the bottle.
Hence a bottle of "world" just has however much world will fit in it. Given where we get everything we put in bottles, any bottle probably counts (maybe not evacuated ones).
And once some vindictive law enforcement person puts you on that list you're never getting off it. No one's career is going to be furthered by removing bad names on that list, but removing a name that goes on to hijack a plane is a sure way to end your career. Hence no one is going to remove anyone...
No we've tracked lots of rocks in space before, after they whiz by of course for ones that size. Which is the predicted to hit part (rather than "oh look it almost hit") and why it was originally news. It's news again because yes it did hit.
The biggest real estate bubble the country has ever seen (the world has ever seen possibly, though the UK bubble may beat it out once this is over) is not a common fluctuation due to inefficiencies. It's mania and ends badly every time.
None of the price decrease in housing has been a result on loss of investor confidence. Prices are *still* way above what the fundamentally should be, because the bubble isn't done busting. Sure investor confidence has plummeted - but that's rational and is bringing the prices back to a normal level and the fundamentals are the level the confidence should be,
Just like the dot-com stocks did not drop because of "a loss on investor confidence" but because they were worth far less than what people were willing to pay for them during the bubble. Housing is in the same situation and the result will be the same, with the huge difference that this time a large number of people leveraged to the hilt and banks let them do so with no skin in the game so huge numbers of defaults is the obvious result.
The government is not going to profit from this. People borrowed too much and can't afford to pay it back. They could profit nominally if they pushed inflation through the roof, but that hardly counts. If they don't mess with inflation then the only way those mortgages do not default is if the principle is lowered - and that obviously destroys the value of those securities anyway.
You can't profit by overpaying for assets when you are still closer to the top than the bottom of a bubble on the down end.
Slashdot Mirror
Since there is significantly less currency existing than there is money represented in bank computers by series of bytes, what are those goods and actual assets exactly?
Your bank account it a series of bytes.
Why not?
Why have a round trip back to the server to find the error. Have the client notice it and report it without having the user submit and wait.
Obviously, you do the same check on the server with the standard round trip "you did this bit wrong, please try again" response.
So you would NEVER do that? Seems a strange religious believe to hold.
Yes everyone else is printing money too, sadly in an attempt to sustain the US economy. But you have rallies in bear markets. And the dollar is long term trending down, and with the Fed and Treasury conjuring money out of thin air on a daily basis it will continue to do so.
I agree the dollar just bounced, in a huge way. Offload your US dollars while they are worth something.
Those personal savings are the underlying source of capital investment. Yes big companies have big cash reserves (in some cases), but that's one shot stuff. If the populace isn't saving then there's no new capital for investment (well companies can horde instead of paying dividends to their owners, but that makes things worse since you end up with the available savings stuck in businesses that don't use it efficiently).
That's how the capitalist system is supposed to work. People save money, and want to invest it to get more money. Other people borrow that money promising to pay it back with interest, and use it to invest in business capital which will then generate enough profits for them to make the repayments. And the cycle goes around and around. It broke in the US, because the populace stopped saving and instead borrowed money to buy consumer goods - that money was no longer available for capital investment so it's a double hit. The consumers now have to pay back more money than they spent, and businesses didn't get to invest that money into things which generate more wealth. And both consumer and business borrowings were often sourced from foreign savers, which means the interests payments are a drain on the US economy rather than providing more savings for future investment.
It broke in Japan in the opposite fashion, businesses stopped investing in business capital no matter how low they set interests rates... At least in that case they finish up with savings which helps kick start things easier later (unless of course you loaned those savings to the US consumer who has no intention of ever paying it back).
And GMs $20 billion of cash is so great they are borrowing billions directly from the Federal Reserve. Of course they lost $15 billion last quarter, and have been burning through those cash reserves at $1 billion a month...
But it isn't US companies that are the real problem. It's the US consumer - who can't both repay their debts and consume. US exporters will do fine (once the dollar gets to reasonable levels so they are competitive with China).
If you price them cheap enough you'll sell them, that's what collapses the dollar.
We'll trade you this $1 billion US dollars for $2 million euros? No? $200,000 euros? OK! Flood the forex markets with market sell orders, until the dollar is literally worth nothing - because as you say no one will buy them.
Or they just flood them back into the US buying up US equities as fast as they can, and when the US government bans them from that bidding up the price of US exports (which will be great for exporters, not so great for Americans who now can't afford bread because all the American grown wheat is being sold to China at 20 times what American's can afford). That is what will restore the US in the end, once the US dollar collapses and the US becomes competitive again - it's just a painful experience to go through.
That drives up inflation which has the same end game. Note that foreign governments buying up US assets is what's propping up the US stock market at the moment - also note they are demanding and getting huge preferred dividend payments, draining more capital from the US.
For the treasuries, if the world stops buying them the US can't roll over its debt and won't be able to pay back the ones expiring. So it either defaults or prints money. Both of which send the dollar even further down. Plus if China is selling treasuries at 50c on the dollar, good luck to Treasury trying to sell new ones.
The US has managed to put an enemy state in a position where it can overnight collapse the US economy (collapsing its own as well - so we're back to cold war style MAD though financial is better than nuclear for the rest of us).
At some point China wakes up to the fact that it is getting the raw end of the deal. Probably sometime after the US really goes for broke printing money. Yes China loses big time, but the sooner they cut their loses and bail out of their US dollar holdings the better off they will be.
Since they don't really car so much about the next election, they can actually make the short term sacrifice for long term gain that US politicians can't.
Note, that a rapid conversion of production for exports to production for domestic use has already happened in the last hundred years. At the end of WWII the US shifted it's economy from producing war machinery - which is essentially an export since it is shipped overseas and usually doesn't come back since the bullets are used and the tanks blown up, it certainly isn't consumer by the domestic populace - to domestic production. And the result was a economic boom the likes of which hadn't been seen since the industrial revolution. With standards of living shooting up.
China can do the same thing, probably even better since there's no retooling needed - the factories are already producing consumer goods instead of bullets (though they do seem to use the same amount of lead...)
So how is shipping goods to the US different from the dumping them in the ocean? All sending them over to the US does is cause dollars to be sold by American importers to pay the Chinese exporters, then the Chinese government has to sell some of it's yuan in order to buy US dollars in order to keep the exchange rate "semi-pegged", and then buy some treasuries with those dollars.
So what is the difference with the Chinese government directly giving those yuan to the chinese exporters (buying the crap) and then dumping it in the ocean?
The point is China doesn't gain anything from this trade, except for US dollars - which it is becoming pretty obvious are worthless IOUs from a country on a downward spiral.
America doesn't have any capital - the savings rate is negative. In order to build a factory in the US money needs to be borrowed from abroad. China on the other hand has huge amounts of savings to invest - as does Japan.
So yes factories can be built in America - they likely won't be built by "us" though, since foreigners will have to provide the capital.
What do you think happens if tomorrow China sells all its US dollar reserves to buy yuan or euros or whatever? And sells it's US treasury holdings as well?
Yes, China loses a stack of money - since the value of those two things plummets. But they must know by now that those things aren't worth so much anyway - and being first to cash out is a big win.
The US collapses the next day. Since oil is now $10,000 a barrel (or 80 euro), food is equally too expensive to afford.
Of course the US might just decide to go to war over such a thing, but the military is stretched pretty thin already, and they'll have to be paid in something other than US dollars...
Which is why the Chinese economy is stronger.
What would the difference be if instead of shipping those goods to the US, China instead dumped them in the ocean?
The US wouldn't have those goods. And china wouldn't have yet more IOUs from the United States. We pay them with dollars, they exchange them for treasuries (or equities when we let them) in order keep the yuan artificially low.
I think the Chinese could do without essentially worthless IOUs (like the US can afford to pay its debts) a lot more than the US can do without imports (of clothes, food, etc, etc).
And of course China doesn't have to dump them in the ocean, they can sell them to their own people - who will be much richer than Americans once their currency stops being artificially surpressed.
Of course there's plenty of pain in the middle - but since the US is about to have a very severe recession these events might be forced on China anyway.
Surely you can see that the consumer half of the producer/consumer relation is the less important half. Anyone can buy and watch a TV, it takes actual industry to be able to make one. Chinese people can start consuming much more easily than American people can start producing - if that trade stops.
You're in for a shock. The end result of the current financial problems is China waking up to the fact that it doesn't need to lend the Americans money so they buy its crap - its own consumers can instead of saving money to be loaned to Americans, buy crap themselves.
Yes, the Chinese economy is going to collapse along with the US economy.
However, they have the production base (that America shipped over there...) and a large population, and India is a big importer of Chinese goods already.
The US has consumer debt with no capital investment to show for it, crumbling infrastructure, and a production base smaller than it once was.
Also, when it comes to poor people rioting and killing the rich people and destroying yet more infrastructure - China has more experience with dealing with that (in a way one would hope America wouldn't deal with it).
So China will recover faster, and will be the new engine of the world economy - both production and consumption...
The US is a drain on the world economy (that's what a trade deficit is - historically you ran a trade deficit in order to invest in capital works, so you could pay the money back later, the US has instead invested in flat screen TVs and vacations), the sooner it is cut off the better for the rest of the world.
Yes, short term is will tank the whole world economy - but it has to be done at some point. And right now there's enough motivation to pull the trigger - it's pretty obvious that money loaned to the US isn't getting paid back with dollars worth anything close to what the ones loaned were worth.
If you are talking about non-US locations then don't say "in the US", since everyone else will assume that when you do you are making a statement about things "in the US".
If you prefer some slightly more credible sources:
http://www.mdanderson.org/departments/newsroom/display.cfm?id=40C16848-750C-4143-A7382A752ED6E734&method=displayFull&pn=9cd50d60-76be-11d4-aec300508bdcce3a
http://www.ncbi.nlm.nih.gov/pubmed/18462866
http://www.cancer.gov/Templates/drugdictionary.aspx?CdrID=43115
It's a compound that MD Anderson has been doing a bunch with - and a whole stack of clinical trials.
It does have some issues - it seems to affect mitosis on healthy cells http://cat.inist.fr/?aModele=afficheN&cpsidt=13711465
Oh yes, because you just pour one into other and boom plane ending explosion!
Oh wait no it doesn't, you have to mix them slowly drop by drop and manage not to be overcome by the fumes and then wait a few hours and then you have your explosive. Or do it quickly and have about as much explosive potential at setting your laptop battery on fire.
format c:
Called email. Just email them to yourself...
Except that the whole idea of the "can't bring a bottle of water" through security is because the terrorists were using magical liquid explosives that can't be detected.
nitroglycerin is a standard nitrogen explosive and hence detected by standard detectors. And one would hope the plan to stop the terrorists didn't involve the security people throwing containers of nitroglycerin into bins in a crowded security bottleneck.
A bottle of "spring water" does not have all the water in the spring, just as much as will fit in the bottle.
Hence a bottle of "world" just has however much world will fit in it. Given where we get everything we put in bottles, any bottle probably counts (maybe not evacuated ones).
s/world/water/
But creating an explosive from a bottle of world is trivial!
Why bring a bomb or a bottle of water when you can just bring a couple of bags full of wireless mice...
50 year old don't marry 14 year old as often these days, though...
"The no-fly list -- a list of people so dangerous they are not allowed to fly yet so innocent we can't arrest them"
-- Bruce Schneier http://www.latimes.com/news/opinion/la-oe-schneier28-2008aug28,0,3099808.story
And once some vindictive law enforcement person puts you on that list you're never getting off it. No one's career is going to be furthered by removing bad names on that list, but removing a name that goes on to hijack a plane is a sure way to end your career. Hence no one is going to remove anyone...
No we've tracked lots of rocks in space before, after they whiz by of course for ones that size. Which is the predicted to hit part (rather than "oh look it almost hit") and why it was originally news. It's news again because yes it did hit.
Just tracking does not get it on cnn.com.
A bit bigger than a shooting star, but frequent enough.
It's news because it was the first one that has been tracked, predicted to hit, and then hit.
You mean like the bugs in Starship Troopers, though they were slow motion anti-air (well anti-orbiting space craft maybe) shots...
The biggest real estate bubble the country has ever seen (the world has ever seen possibly, though the UK bubble may beat it out once this is over) is not a common fluctuation due to inefficiencies. It's mania and ends badly every time.
None of the price decrease in housing has been a result on loss of investor confidence. Prices are *still* way above what the fundamentally should be, because the bubble isn't done busting. Sure investor confidence has plummeted - but that's rational and is bringing the prices back to a normal level and the fundamentals are the level the confidence should be,
Just like the dot-com stocks did not drop because of "a loss on investor confidence" but because they were worth far less than what people were willing to pay for them during the bubble. Housing is in the same situation and the result will be the same, with the huge difference that this time a large number of people leveraged to the hilt and banks let them do so with no skin in the game so huge numbers of defaults is the obvious result.
The government is not going to profit from this. People borrowed too much and can't afford to pay it back. They could profit nominally if they pushed inflation through the roof, but that hardly counts. If they don't mess with inflation then the only way those mortgages do not default is if the principle is lowered - and that obviously destroys the value of those securities anyway.
You can't profit by overpaying for assets when you are still closer to the top than the bottom of a bubble on the down end.