Dr B,
Thank you for your kind and elaborate note.
Although 40 years gone, I recall my prof saying, that most of us feeling we can ‘lick’ inflation. He gave this example: say the inflation was caused by increase in prices of automobile among other thing. So, I did not buy an automobile in the said period, I have ‘saved’ that much or beaten the inflation parameters to the extent the car prices went up, since I was not in the market for a car. Does that make sense?
The value of the u.s. dolla or any other currency, is a myth, ie truth or lie, depending on your viewpoint, collectively agreed to or forced to agreed to, by the countries of the wealth. For whatever reason, the u.s. feds now control the printing of the greenback, but with today’s technology, nothing to prevent china doing the same. Except if china does it, it would be cutting off its nose to spite its face.
Today’s economics really begins with 1990 china, when deng in his own inscrutable way, long thinking, decided to do a number on the world. The Chinese people have been suffering for a thousand years, and a few more years would not hurt. So he started he ‘reform’, which in reality is an economic war against the world.
Knowing the weakness of the world for cheap mass produced produced, and the American obsession with ‘free trade’, he saw an opportunity, to utilize china’s vast human resources of slave labour, to producing safety pins to computers, at a volume, rate and magnitude that no one in the world could match. To do this, he needed a subservient workforce, which was available in the millions through the unemployed landed peasantry. The capital came from the sucker banks in the west, and where there was no money, the Chinese banks borrowed from themselves. (the Chinese banks, it has been rumoured the worst placed financially, but Beijing government rules them with an iron hand to prevent either a run on the money or auditing their books).
One by one factories across the western world closed. There is a sad and poignant documentary produced for the u.s.a. public broadcasting, of how that iconic American brand, rubber maid, was forced to close all its factories in the usa, transfer them to china, and add insult to injury, send their American workers to train their new Chinese replacements. And there are thousands of stories like that spread all over usa, where small proud factory towns have closed sending those workers to brewing mcdonald coffee or making the beds for patel owned days inns.
The next step from china was to addict the world with its cheap goods. Today, the navrathri dolls are made in china. Sivakasi fireworks, once protected post independence from Chinese fireworks, feel threatened again. Why? Because for those who want to burst pattasu, Chinese products are reliable, cheaper and more bang or burst than their sivakasi counterpart, who through all these protected years, continued to exploit child labour, dangerous working conditions, and did not spend one paisa on innovation or improvement. The same lakshmi vedi, bus vaanam and cap dominated the market for 60 years, with nothing new coming up. Only the prices went up.
Then there is the xfer of technology. The apple ipod maybe conceived in san Francisco, but only the Chinese know how to make it. Airbus 320 is now made in china, enabling china to leapfrog 100 years of aerospace technology in a brief span of 5 years. Why? China buys more than 50% of a320, which it pays back, with money earned from Europe, with profits earned from selling Chinese merchandise.
If I were the usa president, I would just prime the printing press and flood the world with worthless dollars. It has been done before in recent memory, when president lyndon Johnson faced with the same dilemma as obama, ie the Vietnam war, Medicaid & medicare (Great Society programs) just let the presses work overtime. The reverberation lasted for years, when we were given 8 to 10% increases in salaries, and felt good but paid 14% mortgage rates.
Maybe we are in for such a correction in the near future? Personally even though I do not like the republicans, it may not be a bad thing for obama to go.
Thank you for your kind and elaborate note.
Although 40 years gone, I recall my prof saying, that most of us feeling we can ‘lick’ inflation. He gave this example: say the inflation was caused by increase in prices of automobile among other thing. So, I did not buy an automobile in the said period, I have ‘saved’ that much or beaten the inflation parameters to the extent the car prices went up, since I was not in the market for a car. Does that make sense?
The value of the u.s. dolla or any other currency, is a myth, ie truth or lie, depending on your viewpoint, collectively agreed to or forced to agreed to, by the countries of the wealth. For whatever reason, the u.s. feds now control the printing of the greenback, but with today’s technology, nothing to prevent china doing the same. Except if china does it, it would be cutting off its nose to spite its face.
Today’s economics really begins with 1990 china, when deng in his own inscrutable way, long thinking, decided to do a number on the world. The Chinese people have been suffering for a thousand years, and a few more years would not hurt. So he started he ‘reform’, which in reality is an economic war against the world.
Knowing the weakness of the world for cheap mass produced produced, and the American obsession with ‘free trade’, he saw an opportunity, to utilize china’s vast human resources of slave labour, to producing safety pins to computers, at a volume, rate and magnitude that no one in the world could match. To do this, he needed a subservient workforce, which was available in the millions through the unemployed landed peasantry. The capital came from the sucker banks in the west, and where there was no money, the Chinese banks borrowed from themselves. (the Chinese banks, it has been rumoured the worst placed financially, but Beijing government rules them with an iron hand to prevent either a run on the money or auditing their books).
One by one factories across the western world closed. There is a sad and poignant documentary produced for the u.s.a. public broadcasting, of how that iconic American brand, rubber maid, was forced to close all its factories in the usa, transfer them to china, and add insult to injury, send their American workers to train their new Chinese replacements. And there are thousands of stories like that spread all over usa, where small proud factory towns have closed sending those workers to brewing mcdonald coffee or making the beds for patel owned days inns.
The next step from china was to addict the world with its cheap goods. Today, the navrathri dolls are made in china. Sivakasi fireworks, once protected post independence from Chinese fireworks, feel threatened again. Why? Because for those who want to burst pattasu, Chinese products are reliable, cheaper and more bang or burst than their sivakasi counterpart, who through all these protected years, continued to exploit child labour, dangerous working conditions, and did not spend one paisa on innovation or improvement. The same lakshmi vedi, bus vaanam and cap dominated the market for 60 years, with nothing new coming up. Only the prices went up.
Then there is the xfer of technology. The apple ipod maybe conceived in san Francisco, but only the Chinese know how to make it. Airbus 320 is now made in china, enabling china to leapfrog 100 years of aerospace technology in a brief span of 5 years. Why? China buys more than 50% of a320, which it pays back, with money earned from Europe, with profits earned from selling Chinese merchandise.
If I were the usa president, I would just prime the printing press and flood the world with worthless dollars. It has been done before in recent memory, when president lyndon Johnson faced with the same dilemma as obama, ie the Vietnam war, Medicaid & medicare (Great Society programs) just let the presses work overtime. The reverberation lasted for years, when we were given 8 to 10% increases in salaries, and felt good but paid 14% mortgage rates.
Maybe we are in for such a correction in the near future? Personally even though I do not like the republicans, it may not be a bad thing for obama to go.
