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Since our elected officials appear unable to come up with a rebuild America jobs program for fear that this would entail relieving the rich of their layabout loot, thereby further spooking capital markets, it has fallen to the unelected Federal Reserve to do what it can--mostly, from what I can tell, by providing tax payer guarantees to and putting ever more money into the hands of those same proven misallocators of capital responsible for the financial crisis and all its attendant joys.

The Fed's Quantitative Easing 2 involves a second mass printing (or digital equivalent thereof) of $600 billion dollars. QE 1 was $2 trillion. While just the prospect of the Fed action is already causing movement in the bond markets, a recent Bloomberg poll indicates 75% of those surveyed believe the Fed action will have little or no effect on unemployment. There are other concerns. One is the Yellow Horde effect.

  There are fears that QE 2 will precipitate an international currency war as other countries, particularly China will take measures to keep their currencies low relative to the QE2-devalued dollar and thus keep their exports competitively priced.  

But wait, there's more. China it appears has crazy bankers too, you'll be glad to learn.

Li Ruogu, chairman of the Import-Export Bank of China, had what I thought was a rather novel way of expressing China’s dependence on trade and why the rest of the world should accommodate China.  According to an article in Wednesday’s South China Morning Post:

The head of a government bank on Wednesday rejected suggestions the yuan is undervalued. He said a rapid rise in the yuan would cause massive job losses and Western nations would have to be ready to accept millions of Chinese immigrants.

"If you are not ready, then please don’t pressure China to appreciate its currency, because it cannot solve the issues faced by the West," said Li Ruogu, chairman of the Import-Export Bank of China, speaking at a conference in Beijing.

QE 2 and the Titanic (Michael Pettis)

 Employers will no longer be burdened with the inconvenience of sending our jobs to China. Ever obliging, China will send their workers to the jobs. What jobs, you might ask? Good question.

Originally posted to Wolf10 on Mon Nov 15, 2010 at 06:24 AM PST.

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Comment Preferences

  •  Tip Jar (5+ / 0-)

    The frog jumped/ into the old pond/ plop! (Basho)

    by Wolf10 on Mon Nov 15, 2010 at 06:24:38 AM PST

  •  Excellent idea! (2+ / 0-)
    Recommended by:
    HoundDog, Wolf10

    We can work with ACORN to strategically locate these millions of Chinese immigrants in key swing states in ensure the re-election of Barack Obama.

    \snark

  •  I saw that statement too. How funny. (3+ / 0-)
    Recommended by:
    ssgbryan, Wolf Of Aquarius, Wolf10

    Many of the Chinese have such a different mindset than we do, it's almost as if they are living on the opposite side of the planet.

    One overlooked aspect of quantative easing, is that what we are really doing is inflating our way out of our debt crisis.  

    Creating a persistent 3% to 4% inflation rate means paying back all future debts with a much cheaper dollar.  

    It is essentially a wealth transger from savers to consumers.  Or if you will, the rich to the poor.

    While we can't muster the political support for such a taxed based transfer through Congress, the path of least resistence is inflation.

    Of course, this simple solution gets complicated if the lenders figure this out, and stop lending us money.

    But where else do you expect the current imbalances to resolve themselves?  Higher taxes, less consumption?   Cutting the defense budget in half?  

    If no one gives in, printing money is the only way out.  

    The means is the ends in the process of becoming. - Mahatma Gandhi

    by HoundDog on Mon Nov 15, 2010 at 06:33:24 AM PST

    •  Don't they have to start lending before (0+ / 0-)

      they stop lending?

      The frog jumped/ into the old pond/ plop! (Basho)

      by Wolf10 on Mon Nov 15, 2010 at 06:35:08 AM PST

      [ Parent ]

      •  You meant international lenders, methinks now, (1+ / 0-)
        Recommended by:
        HoundDog

        I misunderstood.

        The frog jumped/ into the old pond/ plop! (Basho)

        by Wolf10 on Mon Nov 15, 2010 at 06:37:24 AM PST

        [ Parent ]

        •  Yes, but the same logic applies to domestic (1+ / 0-)
          Recommended by:
          Wolf10

          investment.  Donald Trump just said in a recent interview that if we try to raise taxes on the super wealthy, they will just move to a more favorable country.

          Sort of galling really.

          But, right now investors a sitting on several trillion dollars of cash.  Not certain they want to lock their money into fixed valued investments, like bonds.  

          The means is the ends in the process of becoming. - Mahatma Gandhi

          by HoundDog on Mon Nov 15, 2010 at 06:42:00 AM PST

          [ Parent ]

          •  I'm tending these days to (1+ / 0-)
            Recommended by:
            HoundDog

            a degree of autarky, selective tariff, draconian control of concentrated capital and the like. Nation-states need to start acting as such on behalf of the great majority of their citizens.

            I could see currency and trade wars or even a credible threat of same as moving toward renegotiating unfair free trade agreements.

            The frog jumped/ into the old pond/ plop! (Basho)

            by Wolf10 on Mon Nov 15, 2010 at 06:47:31 AM PST

            [ Parent ]

            •  I've been having quite thoughts like that as well (1+ / 0-)
              Recommended by:
              Wolf10

              After spending decades in Academia indoctrinated on the collective advantages of free-trade, and Porter's The Competitive Advantage of Nations, I feel a little guilty and cautious about it.

              But, many emerging nations have little environmental protections, worker safety, or out-and-out government sponsorship of industry, so it's not really fair to our workers.

              Plus the idea the the wealthiest 1/10 of 1% could move half the wealth of this country to some other to escape taxation, while keeping "vacation" residencies here is discouraging.

              We have a lot of learning and adjustment to do.  

              But, I feel relatively powerless to effect the needed changes.   If we can't even get the American public rally around relatively modest changes to health insurance regulation, how are we going to handle income redistribution, capital controls, and massive broadening of social safety nets for perhaps, the majority of the population.

              I was just thinking about our previous conversation while doing some laundry and the catch phrase "Welfare - not just for the poor anymore," popped into my head (based on the "orange juice - not just for breakfast anymore commercial."

              Ya, like this is going to go over really well, in a country who thinks preventing children with cancer from being blacklisted from health insurance is socialism.

              How sad.

              The means is the ends in the process of becoming. - Mahatma Gandhi

              by HoundDog on Mon Nov 15, 2010 at 07:22:51 AM PST

              [ Parent ]

  •  There is also possibility (2+ / 0-)
    Recommended by:
    koNko, Wolf10

    that the Chinese are doing their utmost to keep their currency from devaluing.

    In trade conferences, China is accommodating demands that it let its currency appreciate in the world market but the problem is. the People's Republic is wrestling with inflation at home.

    Respect mah Facebookthorit-ah!

    by cskendrick on Mon Nov 15, 2010 at 06:44:41 AM PST

  •  You have to look at this from their point of view (2+ / 0-)
    Recommended by:
    koNko, Wolf10

    Look at the population of China vs the US

    China - 1,338,612,968

    US - 310,700,000

    Now consider the size of the GDP of both nations.

    China - $5 trillion dollars

    US - $14.2 trillion dollars

    So we are quick to attack a nation with a third of our economy, but a four times greater population.

    In effect you are telling to China to punish their poor, so it is easier to take care of our middle class.

    •  The American middle class is the (1+ / 0-)
      Recommended by:
      Dr Teeth

      result of at least a century of struggle and social development. Much of the capital being shipped elsewhere was generated here. American workers are being forced to compete with a socially less developed work force, thus undercutting their hard won gains.

      On the other side is the Maoist argument that the American working class were complicit in the super exploitation the the Third World that generated surplus value shared by American capital with American labor.

      I believe both of the above are true. So let's our middle class and the Chinese working class make a deal. Fuck the bankers and their ilk.

      The frog jumped/ into the old pond/ plop! (Basho)

      by Wolf10 on Mon Nov 15, 2010 at 06:55:06 AM PST

      [ Parent ]

      •  The myth of the middle class (1+ / 0-)
        Recommended by:
        Wolf10

        The American middle class really only existed from the end of WWII till about 1970.  Since that time it has been on the decline.

        When you strip all of the theories away, I believe there is a simple explanation for what happened.

        The rest of the world had to rebuild, but lacked the infrastructure to do so.  This put America in the catbird's seat in terms of exporting our manufactured goods.

        •  What of the European middle class, then? eom (1+ / 0-)
          Recommended by:
          Dr Teeth

          The frog jumped/ into the old pond/ plop! (Basho)

          by Wolf10 on Mon Nov 15, 2010 at 07:07:27 AM PST

          [ Parent ]

          •  they were bombed out from WWII (2+ / 0-)
            Recommended by:
            Dr Teeth, Wolf10

            Just guessing that'sdr teeth's point.

            •  Middle class development is in good part (2+ / 0-)
              Recommended by:
              OIL GUY, Dr Teeth

              the result of workers keeping a larger percentage of the value they create than is necessary for mere survival and procreation. There is much more to it than that of course, but without this element you don't get a middle class.

              The frog jumped/ into the old pond/ plop! (Basho)

              by Wolf10 on Mon Nov 15, 2010 at 07:19:16 AM PST

              [ Parent ]

              •  workers SHOULD get a larger (2+ / 0-)
                Recommended by:
                Dr Teeth, Wolf10

                percentage of value the create, the question is how to make this happen. Full socialist revolution? That didn't happen in the US but we got a middle class out of WWII anyway. Could say the workers were bribed into not revolting by being allowed to become a middle class.

                •  That the U.S. working class was bribed (1+ / 0-)
                  Recommended by:
                  Dr Teeth

                  into being domestically quiescent and reactionary, particularly as regards support for U.S. corporate control of Third World resources and markets, is a tenet of radical anti-imperialist theory.

                  The period we are in now differs in that it is the workers of these countries and not just their natural resources that are being integrated into global capitalism. Capital is currently having a jolly old time setting the workers of various nations against one another. I'm guessing the day when they get their fingers seriously burned for playing naughtily with fire is not so very far off.

                  The frog jumped/ into the old pond/ plop! (Basho)

                  by Wolf10 on Mon Nov 15, 2010 at 07:36:35 AM PST

                  [ Parent ]

                  •  interesting guess (2+ / 0-)
                    Recommended by:
                    Dr Teeth, Wolf10

                    I'm guessing it's a far way off just because there is no movement to oppose it currently. The closest we get is us just talking about it here.

                    •  Historically, capitalism has worked well (0+ / 0-)

                      enough for enough people so that it enjoyed enough popular support to be maintained.

                      Indeed, there is much to recommend it. However, we seem now to be in a period of capital concentration and constipation. Governments in concert with one another must step up and break some of the old rules as regards capital property. That is, they've got to take it away from some and give it to those who will do something helpful as opposed to just hoarding it or creating yet more asset bubbles.

                      The frog jumped/ into the old pond/ plop! (Basho)

                      by Wolf10 on Mon Nov 15, 2010 at 07:55:08 AM PST

                      [ Parent ]

                      •  Disagree on it historically (1+ / 0-)
                        Recommended by:
                        Wolf10

                        being popular, there's just usually a lot of ignorance about whether anything can be done to oppose it. Sometimes people like Jesus Christ try to stop it but are put to death before a revolution can take steam. The whole idea of capitalism says that we'll always be in a period of capital concentration. Only when socialism is added to the system does that tendency reverse itself. Such as what you reccommend if a govt was to step in and break some of the rules of capital property.

                  •  Corporatism vs Capitalism (1+ / 0-)
                    Recommended by:
                    Wolf10

                    I think there is a line to be drawn here.  Capitalism is ideally supposed to be a distribution of power via economic means.  The market ideally should act as a filter, when the seller no longer treats the consumer fairly.

                    I think what we are seeing is much different from capitalism.  We are seeing capitalism being used as the device for consolidating power.  One only needs to see the amount of multi-national corporations popping up, to see that this power is becoming codified beyond national borders.

                    In pure capitalism there should be competition, but we are seeing the amount of players dwindle over the last 20 years.  Collusion is more profitable than competition.  It is perhaps the result of game theory being applied broadly.

                    Perhaps this is just the logical end of capitalism.  Socialism seems to yield a version of state capitalism, which may be the logical end for socialism as well.

                    There are times whether I consider if democracy is even possible.  Perhaps it's just not in our nature.

                    •  The rest of the developed world has (1+ / 0-)
                      Recommended by:
                      Dr Teeth

                      adopted a hybrid of socialism and capitalism within a democratic framework. They have their problems, to be sure, but they tend to be higher quality problems than we have.

                      The frog jumped/ into the old pond/ plop! (Basho)

                      by Wolf10 on Mon Nov 15, 2010 at 07:58:04 AM PST

                      [ Parent ]

          •  They are all rioting (1+ / 0-)
            Recommended by:
            Wolf10

            Because the socialistic systems, which were in place after the war, were too heavily invested in American capitalism.  Now they are facing austerity measures, which threatens the social balance that has remained in place for 60 years.

            Europe also benefited from little military spending, as the US funded the protection of Europe during the cold war.  This left them free to make social investments.

            I truly believe what we are seeing in the world both economically and politically is an unraveling of the fabric woven in the post war era.  For so many decades the global landscape was defined by lines drawn, when the allies met in Berlin.

            •  True that! (2+ / 0-)
              Recommended by:
              semiot, Dr Teeth

              I truly believe what we are seeing in the world both economically and politically is an unraveling of the fabric woven in the post war era.  For so many decades the global landscape was defined by lines drawn, when the allies met in Berlin.

              Because the crisis is global and because of historical advances in social theory and practice (mostly elsewhere), I am rather optimistic that we will not completely waste this crisis.

              But in the meantime we are, particularly in the U.S., in what Gramsci described as an interregnum where the old is dying, the new cannot yet be born, and there are a great many grotesque manifestations.

              The frog jumped/ into the old pond/ plop! (Basho)

              by Wolf10 on Mon Nov 15, 2010 at 07:26:21 AM PST

              [ Parent ]

      •  Well, the Chinese didn't get much chance (1+ / 0-)
        Recommended by:
        Wolf10

        To become middle class in the US, did they?

        They got shipped over to do the dirty work and when that was done, got kicked-out by European workers with the help of a UK immigrant named Samual Gompers, no?

        Does the Chinese Exclusion Act ring a bell?

        "Meat vs Rice".

        What about my Daughter's future?

        by koNko on Mon Nov 15, 2010 at 12:39:27 PM PST

        [ Parent ]

  •  Why, the jobs the immigrants will bring with them (0+ / 0-)

    Didn't you get the memo about Latino immigration?  It was great for the US economy and created jobs.  That's what Kos said.

    So if China wants to send us millions of uneducated unskilled workers, that will be great for our economy too right?  What's the problem?

    •  Thanks for joining in but I'm going (0+ / 0-)

      to let this one pass for now.

      The frog jumped/ into the old pond/ plop! (Basho)

      by Wolf10 on Mon Nov 15, 2010 at 06:56:34 AM PST

      [ Parent ]

    •  They wouldn't be uneducate or unskilled (1+ / 0-)
      Recommended by:
      Wolf10

      The point is that the Chinese middle class would be facing massive inflation.  So they would take their money elsewhere in the world.

      It is like the student visa programs.  Someone from India or China might earn their doctorate here, but go home due to the emerging economies.  Someone in the same situation from Nigeria would be more likely to stay in the US, rather than face the economic challenges back home.

      In the 70s and 80s many immigrants from China and India stayed in the US after receiving their education here.  Recently that trend has began changing, as these markets have been emerging.

      •  I have a Russian step-daughter-- (1+ / 0-)
        Recommended by:
        Dr Teeth

        its complicated--she has elected to remain here to live and work.

        The frog jumped/ into the old pond/ plop! (Basho)

        by Wolf10 on Mon Nov 15, 2010 at 07:03:25 AM PST

        [ Parent ]

      •  That is NOT what China said (1+ / 0-)
        Recommended by:
        Wolf10

        Even with very high inflation, the new Chinese middle class would not be able to afford a middle class living here, and they would be leaving their jobs behind.

        And China wants their skilled, educated workers.  They have no plans to return to 3rd world status.
        No, when China says we'll have to take millions of their workers, unskilled and uneducated is exactly who they're talking about.

        It will be the exact same thing I saw in Mexico due to NAFTA.  The factories were sparking clean, full of fresh scrubbed faces, the whitest Mexicans I have ever seen.  Mexico sent us the unskilled peasants they didn't want anymore, and left it to us to pay for educating and training them.  China will do the same.

  •  the funny part (1+ / 0-)
    Recommended by:
    Wolf10

    Is back in the days before nukes, china really would invade us over something like this. I'm not saying they would succeed, invasions of other people's lands is hard as we are seeing in the middle east and all of history can attest to, it also shows that rational thought doesn't always go into war planning.

    •  HOW would Chinese have invaded the US (1+ / 0-)
      Recommended by:
      Wolf10

      Back in the days? The Pacific is a mighty big ocean to swim across.

      What about my Daughter's future?

      by koNko on Mon Nov 15, 2010 at 12:32:56 PM PST

      [ Parent ]

      •  Japan bombed pearl harbor (0+ / 0-)

        Maybe they would have continued towards the mainland if they could, obviously Japan ended up getting routed and the world shortly saw that atomic weapons did exist, putting and end to that war. Just a hypothetical though but say nukes never existed. Say China did invade us, they have a much larger population for their army to have soldiers from, that's a big advantage. Of course that's not to say they'd defeat us, we have our own land and we could fight back guerilla style, most likely would push China out. Now maybe you're saying what reason would China have for invading us, knowing it was likely to fail. Well whoever said wars are started for rational reasons?

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