Wrong again. 60% of S&P500 revenues are derived now from exporting goods and servicing to foreign nations, namely Asia. Paulson and Co. insist on yuan appreciation, so that we can have a competitive edge in the export market.
Doom and gloom sells. We also are genetically programmed to search for doom and gloom potential problems that will harm us. The run away genes survived as the ones on the serengetti plain who hung around and did not run away were usually eaten and had their genes removed from future generations. Even though money is only 5-10,000 years old the part of the brain that deals with money is the very old reptilian flight or fight part of the brain. Thats why we react to events evolving money emotionally and then then use the frontal cortex(the new brain above our eyebrows) to make rational/logical arguements after the fact to justify our emotional reaction. So we emotionally go for the doom and gloom and then rationalize why we think it is true. Having personally predicted 8 of the last 2 recessions I am now a firm believer in the ability of the US economy to muddle through. The individual American spirit to constantly create something out of nothing will pull us out of the lows. Very few countries can do this. After bashing pieces of metal with cheap labor China will palteau just like Japan because they cannot make something out of nothing. India will probably be the best bet of evoloving beyond metal bashing and create something out of nothing. The Fed prints more dollars. The dollar gets weaker and we muddle through with maybe a few quarters of slow/negative growth. The wild card is the politians doing something stupid.
Some valid points, esp the part abut the Reticular Activating System (crocodile level part of the brain) overriding the Cerebral cortex, not vice versa. Also China will plateau and if it does not it will have sucked out ALL the jobs from US/EU so will have no one to sell to as the West will all be unemployed. On a similar vein, the organisms that were programmed to live forever (rather than die after a set period) all died out................
Oh yeah...then what are all those currency traders doing then in terms of influencing the price? How about the demand and supply of the Dollar on the world markets? Are you confused as to how a floating currency operates? The US government isn't forcing the dollar into a narrow range and controlling its movement on the world markets. That's a huge difference from how the Chinese government directly buys and sells its own currency ON A DAILY basis to keep the currency confined to a controlled goal.
There's no doubt the US will come out of the next recession as it's always has.. but it won't be in the same shape/form. Welcome the new "slave" class with debt up the ass for life. What's that called again??? Indebted servitude? Surprise! Cheap labor and domestic too!
Wrong, the Chinese government directly controls where the Yuan goes. Call it what you want. Call it a "managed float" if you want. The point is that the Yuan is still not valued where it should be if the Chinese government allowed a completely market controlled float. And frankly, if the Chinese goverment did let it float, it would probably cause a crash in the Chinese economy so it's really not in their best interests to let it float.
It's still a market controlled float and not a government "pseudo-float". That's no subtle difference.
We still have a massive trade deficit. That isn't going to change next year or in 5 years. Americans still consume massively more than China does.