Dick Morris writes:
The Chinese lend us money because they have to. They buy dollars to make our currency artificially expensive and theirs’ commensurately cheap. With their currency manipulation, our products are 40% more costly in their markets and theirs’ are 40% cheaper in our stores, fueling the imbalance of trade. Once they own the dollars, what are they going to do with them? The only safe thing is to buy U.S. Treasury notes, hence they “lend” us money. If they stopped buying dollars and acquiring an unfair trade advantage over us, we wouldn’t need them to keep lending us money, our economy would be thriving.
We cannot sit by complacently and let China rob us blind, hacking our technology, our military secrets, and our power grid. We need a president who will stand up for America.
"The best way to bail out the economy is with liberty, not with federal reserve notes." - pairunoyd
"The vision of the Austrian must be greater than the blindness of the sheeple." - pairunoyd
My comments in bold. [BTW, here is a fine article that elaborates on the relevant ideas: http://mises.org/rothbard/protectionism.asp ]
The Chinese lend us money because they have to.
As he will explain, I imagine.
They buy dollars to make our currency artificially expensive
1. Erm, who is selling those dollars to China? We are. Are they pointing a gun to our heads? No. So we must be doing it because there is some advantage for us.
Now what could that advantage be? Why on Earth would you, dear reader, sell your dollars and get Chinese money in return? After all, the only thing you can do with Chinese money is buy Chinese goods. You know, the stuff that is being sold in every store in the USA, the stuff that fills every room of your house.
So don't attack the Chinese for their "buying dollars". Thank them for being foolish enough to agree to be paid in useless dollars for their valuable stuff which we no longer make ourselves.
2. Also, what do you mean by a dollar which is "artificially high"? You are complaining that our dollar has more purchasing power than it "should have"?
and theirs’ commensurately cheap.
Which is, of course, a great free gift to us. We get to buy those Chinese goodies much cheaper than we would otherwise. The Chinese govt prints so much moolah that their money goes down in value compared to the dollar, letting us get a nice discount on their stuff.
With their currency manipulation, our products are 40% more costly in their markets and theirs’ are 40% cheaper in our stores,
Not sure where he got those numbers. But really, what do we even make that they would buy if it was 40% cheaper? I mean, are our exports to other countries so huge? Is it only those sly Chinese that sell us more than we sell them?
As Wikipedia says,"...the EU is the largest trading partner of the US with $367.8 billion worth of EU goods going to the US and $268.6 billion of US goods going to the EU..." For a deficit of a cool 100 billion bucks. We also have a deficit with Mexico of 65 billion, with Japan of 62 billion, with Cananda of 35 billion, with Saudia Arabia and Venezuala of 30 billion each, with Taiwan, India, and South Korea of about 14 billion each. Our biggest trade surplus is with tiny Singapore, a piddling 12 billion bucks. We do only 50 billion of annual trade with them anyway, compared to 600 billion with the EU, where we have that 100 billion dollar deficit.
So guys, we have a trade deficit with everyone, more or less, not just China. Kind of hard to blame the Chinese for the whole world not buying our stuff.
fueling the imbalance of trade.
Spoken like a true Mercantilist, making an imbalance of trade sound like something evil. Dick Morris, it's just the opposite. They are giving their stuff away to us for free. Dick, do you buy only from the USA, and boycott Chinese goods, to do your part to balance our trade? Do you pay 40% more for your things, out of patriotism? Or do you think, Dick, that the USA is best served if its citizens pay less for their needs?
Once they own the dollars, what are they going to do with them? The only safe thing is to buy U.S. Treasury notes, hence they “lend” us money.
This is true, but for the word "safe". Treasury notes are a disaster waiting to happen, in fact a disaster already happening. The dollar is losing value at 10% a year [look in the supermarket and at the gas station and at your insurance and medical bills], and the interest on those Treasuries is piddling. The Chinese are losing money as we speak, every second they hold on to those Treasuries.
Note the quotation marks Dick put around the word "lend". It's an old Soviet trick, to mock something by putting quotes around it, when there is nothing to mock. Yes, "Dick", they are lending the US govt money when they buy Treasuries. No quotation marks.
If they stopped buying dollars
They aren't buying dollars, we are buying their products and they are doing us a big favor by accepting our worthless money in payment.
and acquiring an unfair trade advantage over us,
Unfair? What do you mean by unfair? Are they doing something we aren't? Does the US govt sit idly by and not print money? The accurate description is that the Chinese are doing us a HUGE favor, making sure we get their products dirt cheap. Or would you rather pay 40% more for everything, Dick?
we wouldn’t need them to keep lending us money,
Let me get this straight. Say you have trouble making ends meet. You have huge credit card debt. Feeling somebody besides you has to take the blame, you declare, "If only the stores charged me 40% more for everything, then I could pay off all my debts."
our economy would be thriving.
Poor soul, you have no clue as to what makes an economy thrive. Hint: Expensive prices for imports is not the answer.
We cannot sit by complacently and let China rob us blind,
This is a new one. When a store sells stuff at a 40% discount, it is robbing the customers blind.
hacking our technology, our military secrets, and our power grid.
All these claims are either unsubstantiated, or from very unreliable sources [=US govt hacks].
We need a president who will stand up for America.
Glad we agree on that. But you can only stand up for America if you know what America needs.
Imagine a poor little old lady [=the USA] who is having a hard time paying her bills. Her young heroic son, Dick, assures her he will stand up for her and set things right.
"Well Momma, I went to the supermarket and the electric company and all the places you owe money to, and I stood up for you."
"Oh, thank you son. Will they give me a senior citizens' discount?"
"No, Mamma, I got you something much better. They will charge you 40% more."
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It's easy to refute an argument if you first misrepresent it. William Keizer
Good show! I'll bring the popcorn!
Good show! I'll bring the popcorn!
Good show! I'll bring the popcorn!
Toned down version on my blog.