Comments on: Murder-Suicide in Chimerica http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Glen http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html#comment-57203 Glen Fri, 25 Sep 2009 16:48:00 +0000 http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html#comment-57203 Edward you constantly try to raise the point that 'protectionism' is bad, yet ignore that mercantilism is one-way protectionism. Furthermore, the notion that once lifted from poverty, the nations that benefited from access to the western markets will become its customers, is not backed up by reality. Japan has continued to run large trade surpluses with the west. Yet has tolerated the dilution of its US$ holding by China following the same model. China also, despite wanting a new world reserve currency, has shown that they are so worried about the value of their US$ holdings that they bought another 40 billion in US treasuries (with amounts via London proxies yet to be accounted for). The tyre case illustrates a number of things wrong. When Hangzhou Zhongce Rubber, manufacturing under contract to Foreign Tire Sales out of New Jersey, decided to omit a crucial gum strip on tyres they were making, they did not face the consequences of their actions. Tires failed, people in the US were killed and injured. Victims have no recourse other than to sue a US company, Foreign Tire Sales, which has no significant assets. Edward you constantly try to raise the point that ‘protectionism’ is bad, yet ignore that mercantilism is one-way protectionism. Furthermore, the notion that once lifted from poverty, the nations that benefited from access to the western markets will become its customers, is not backed up by reality.

Japan has continued to run large trade surpluses with the west. Yet has tolerated the dilution of its US$ holding by China following the same model. China also, despite wanting a new world reserve currency, has shown that they are so worried about the value of their US$ holdings that they bought another 40 billion in US treasuries (with amounts via London proxies yet to be accounted for).

The tyre case illustrates a number of things wrong. When Hangzhou Zhongce Rubber, manufacturing under contract to Foreign Tire Sales out of New Jersey, decided to omit a crucial gum strip on tyres they were making, they did not face the consequences of their actions. Tires failed, people in the US were killed and injured. Victims have no recourse other than to sue a US company, Foreign Tire Sales, which has no significant assets.

]]> By: The protectionism bogeyman « naked capitalism http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html#comment-6566 The protectionism bogeyman « naked capitalism Thu, 24 Sep 2009 18:38:17 +0000 http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html#comment-6566 [...] I have to admit to hyping the debate now swirling about protectionism. I believe that tariffs are not a very good solution to a trade problem as they are likely to result in retaliation and/or escalation. Moreover, they end up protecting small groups at the expense of higher prices for everyone else.  That is why I wrote the provocatively-titled “Murder-Suicide in Chimerica.” [...] [...] I have to admit to hyping the debate now swirling about protectionism. I believe that tariffs are not a very good solution to a trade problem as they are likely to result in retaliation and/or escalation. Moreover, they end up protecting small groups at the expense of higher prices for everyone else.  That is why I wrote the provocatively-titled “Murder-Suicide in Chimerica.” [...]

]]> By: Vangel http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html#comment-57122 Vangel Wed, 16 Sep 2009 12:42:00 +0000 http://www.creditwritedowns.com/2009/09/murder-suicide-in-chimerica.html#comment-57122 "...This marriage is over. The question is whether it will end gradually and peacefully in divorce or violently in murder-suicide. Right now, it’s looking like the latter." It seems clear that the US is in big trouble and that Obama, who is an economic illiterate that is way over his head, is making things worse. The rate of decline in the USD is now in question and instead of a gradual decline we may see an abrupt devaluation as we did in Argentina when it got in serious trouble by living beyond its means. Of course, prudent Americans can still take steps to protect themselves from the stupidity of their government. They can use what savings they have to purchase physical gold and keep their heads while those around them are loosing theirs. “…This marriage is over. The question is whether it will end gradually and peacefully in divorce or violently in murder-suicide. Right now, it’s looking like the latter.”

It seems clear that the US is in big trouble and that Obama, who is an economic illiterate that is way over his head, is making things worse. The rate of decline in the USD is now in question and instead of a gradual decline we may see an abrupt devaluation as we did in Argentina when it got in serious trouble by living beyond its means.

Of course, prudent Americans can still take steps to protect themselves from the stupidity of their government. They can use what savings they have to purchase physical gold and keep their heads while those around them are loosing theirs.

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