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Toto deVeer

Poultry Wars: How Long Before The Wto Goes To The Shredder?

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Will poultry wars mark the defining moment of trade protectionism?

China threatens to take the USA to the WTO. Hahahaha. How long before the whole world simply shreds this agreement? I reckon it won't survive a year, or the wise-guys will find so many loopholes that it gets emasculated. That seems to be what China is doing.

China wins the first skirmish at the WTO.

But the US is going to put tariffs on, well, everything China exports, because, well, China are currency cheaters.

Hahahaha.

It's quite interesting. Japan does not produce anything that China needs, so they arrest Chinese citizens. China stops rare earth metal exports to Japan (for administrative reasons, of course, so they can't be taken to the WTO).

Of course the US doesn't have anything that China needs either, so China agrees to swap millions of her dead chickens for millions of America's dead chickens, as a sop to the WTO. But now a dead chicken trade war is breaking out. And it emerges that the US military would require 15 years lead time to develop the mining/manufacturing capacity to produce the neodymium magnets that China manufactures for the Pentagon's guided bombs.

But we did save Wall Street Investment Banks, didn't we? Thank goodness for the foresight of our Fearless Leaders. We can export paper (electronically, of course).

Other than raw resources, does anybody in the world produce anything that China needs? I find the logic behind all this utterly befuddling. I'm going to have another cup of Brazilian coffee. :blink:

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I've suggested this before but here goes anyway.

If the US don't like China having a currency peg at what they consider the wrong value, why don't the US peg it at the "right value (awaiting the whirr of printers warming up).

Personally, I think a trade war is just the final distraction before a system reboot.

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China threatens to take the USA to the WTO.

The US has a bit of a history of "WTO rules are for the little countries; we're above them".

US is going to put tariffs on, well, everything China exports, because, well, China are currency cheaters.

Currency cheaters? I guess that means they keep buying US government debt, thus buying dollars. Who's going to lend you all that money if the chinese stop?

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does anybody in the world produce anything that China needs?

Western jobs? For example, the IT industry was born and nurtured to strength in the West but then subsequently taken from the people and handed to China, India, etc. by the robber barron corporations. I doubt these countries could have developed the IT industry themselves without the West's entrepreneurism, property rights, and ready access to capital that were so important to the industry in the early years.

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I've suggested this before but here goes anyway.

If the US don't like China having a currency peg at what they consider the wrong value, why don't the US peg it at the "right value (awaiting the whirr of printers warming up).

Personally, I think a trade war is just the final distraction before a system reboot.

'Cause China 'sets' the peg. No matter what the US does, they can't purchase Renminbi bonds (Japan's recent complaint) so all they can do is try and bounce them into inflating.

Did you see Wolf's article yesterday? (It's subscription I'm afraid - but if you google the headline you may find it on a non-sub website)

'Currencies clash in new age of begger my neighbour'

http://www.ft.com/cm...html?ftcamp=rss

Currency cheaters? I guess that means they keep buying US government debt, thus buying dollars. Who's going to lend you all that money if the chinese stop?

But they only 'need' the money to finance the trade deficit. There is mostly only a trade deficit 'cause China are subsidising their exports/labour by pegging the renminbi by buying US devt. It's a circular argument. If the labour and production partly came back to the US they wouldn't need the slave labour in China. Of course, China would collapse - which is what is going to happen if they carry on with this policy. They've said so themselves.

Edited by Frank Sidebottom

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'Cause China 'sets' the peg. No matter what the US does, they can't purchase Renminbi bonds (Japan's recent complaint) so all they can do is try and bounce them into inflating.

Did you see Wolf's article yesterday? (It's subscription I'm afraid - but if you google the headline you may find it on a non-sub website)

'Currencies clash in new age of begger my neighbour'

http://www.ft.com/cm...html?ftcamp=rss

But they only 'need' the money to finance the trade deficit. There is mostly only a trade deficit 'cause China are subsidising their exports/labour by pegging the renminbi by buying US devt. It's a circular argument. If the labour and production partly came back to the US they wouldn't need the slave labour in China. Of course, China would collapse - which is what is going to happen if they carry on with this policy. They've said so themselves.

Exactly. This is what people just don't understand. China is buying Samurai bonds to keep the Yen up too. The US could restrict treasury bond sales to China, but I'm sure China would just find a proxy somewhere like London to do it behind closed doors.

I just don't see any way out except tariffs on Chinese goods. Buffet (for all his bad points) wanted to implement a quota system. US exporters are given credits that can be applied against US imports. A zero sum game. This is, in extremis, what could happen, and may not be in violation of the WTO. These types of actions are the only thing that can work against a mercantile system like China operates.

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Exactly. This is what people just don't understand. China is buying Samurai bonds to keep the Yen up too. The US could restrict treasury bond sales to China, but I'm sure China would just find a proxy somewhere like London to do it behind closed doors.

I just don't see any way out except tariffs on Chinese goods. Buffet (for all his bad points) wanted to implement a quota system. US exporters are given credits that can be applied against US imports. A zero sum game. This is, in extremis, what could happen, and may not be in violation of the WTO. These types of actions are the only thing that can work against a mercantile system like China operates.

Yes, to keep the Yen up not only for direct mecantilism but also to force the Japanese into buying more dollars to offset the Chinese action. i.e. displaced dollar manipulation by proxy.

It wouldn't suprise me at all if the recent Euro strength has been largely Chinese buying in advance of both the recent votes on protectionism and also the G20 meeting. Similar policy to them buying Yen. Whatever they buy they know it all ends up back in US deficits eventually.

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Yes, to keep the Yen up not only for direct mecantilism but also to force the Japanese into buying more dollars to offset the Chinese action. i.e. displaced dollar manipulation by proxy.

It wouldn't suprise me at all if the recent Euro strength has been largely Chinese buying in advance of both the recent votes on protectionism and also the G20 meeting. Similar policy to them buying Yen. Whatever they buy they know it all ends up back in US deficits eventually.

Thing is, as we have seen its not only china that manipulates its currency. The number of countries that use currency manipulation for merchantalist objectives and to run trade surpluses, literally runs into the dozens. Japan, china, singapore, south korea, germany (yes it is one through its fixed peg to the rest of europe), switzerland malaysia, poland, argentina, israel, thailand, etc, etc.

Once the US breaks china's merchanalist back the US won't really benefit that much, not unless it does the same to the others. Since the export capacity will simply flow to the other merchantilist nations if they are not also dealt with.

Edited by alexw

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  • 142 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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