Llama, Grasshopper, this thread moves faster than an exchange rate in a Russian revolution. As a reforming economihol, you can contribute greatly to us. You've found the nuturing paradigm. There are enormous opportunities arising from economic ignorance. Economists get so tangled up in graphs of consumer surplus in price elastic demand confluences of monetary expansion derived resource causal recessionary depressions with dollars floating everywhere, it's not surprising they lose it. Did you salivate when you read that or sweat? You are curing quickly if you sweated.
You know, one thing has puzzled me for years. It gets blamed on economists, but I reckon it's military people, [who have some economists caged in the Pentagon] come up with it to keep military budgets high.
What's all this "trade balance BS?" Clinton is boasting that the USA can figure out how to put the steering wheel on the right side of the car [is this really the nation that landed people on the moon?] and worrying about the USA/Japan trade balance. This steering wheel configuration will save the balance!
Now, I'm an engineer. So I take a pretty mechanistic approach to the world ["Yeah right! The buggers mad! See, he doesn't even love the sheep, just mechanistic"]. Anyway, it seems to me that if Toyota sends a car over to USA, it gets given some Yankee dollars. Right? So it puts them in the bank, Sumitomo, or some other crowd who then lend it around the place to anyone who wants to borrow it. But don't follow those dollars wherever they flow, they are red herrings. Toyota has got some dollars, either in their pocket or in the bank. Right so far? So they decide to go shopping one day [or maybe just collect interest for a few years].
They quite like holidays despite the propaganda about the hard working Japanese, so buy some Japanese yen, give some to JAL, hop on a JAL plane and take a trip to Britain; because Japan secretly feels like the British Empire of the nineteenth century and has a sneaking admiration for them.
Now JAL have to buy some kero for the plane and give Airbus payments on the plane. So they order some kero from Kuwait or Saudi Arabia, giving them some US dollars, which they swapped for yen with Sumitomo. They give Airbus some francs which they swapped with Sumitomo, [who make a great deal of money swapping currencies into each other for a fee].
Then Kuwait and Saudi Arabia decide they need another fleet of cruise missiles and F111's so they ship over some of these US$ back to USA. Northrop or whoever build a bunch of them and pay their Mexican workers who ship some money back to Mexico and buy a Toyota with the change. Airbus need some more engines so give Lycoming or whoever a bunch of US$, converted by their friendly neighbourhood trader, Sumitomo, who has made grotesque amountd of money now by shuffling it from place to place and currency to currency.
So Clinton moans and groans because the trade balance with Japan is totally in Japan's favour. Japan hasn't bought anything from the USA, but USA has bought heaps from Japan. Even though the dollars have flowed straight back around through various detours into the Toyota dealership in USA. If Japan doesn't buy something from USA, then Clinton won't let the Mexican worker buy a Toyota.
Japan says, well, how about putting the steering wheel on the other side, so you make something we can use? Triumphantly, Clinton announces that they have done so. Victory over the cunning Japanese! "Vote for Me".
Fortunately for Clinton, the Japanese are quite bright, so they gently manage the USA companies from a discrete distance, suggesting to them how they can make products for Japanese. Providing money, machinery, management [like Qualcomm/Sony joint venture for CDMA phones].
Unfortunately, the Auto Workers Union thinks jobs are being lost, so they demand Toyota be closed out. Well, it is election year, so Clinton and Congress put the bite on Japan and stop people in USA buying Japanese products. So guess what happens. [Actually, nothing, because Clinton and Congress aren't totally stupid and they make a lot of noise and come to an agreement at the last moment with the Japanese pretending to have been soundly thrashed by the great vanquishing Mickey Mouse. Hang on, no, Mickey Kantoor isn't it?]
Now Grasshopper, you must be catatonic, epileptic, drooling like a NZ shepherd with a field full of ewes, or heading for another 12 step meeting.
Isn't it true that the money flows ALWAYS match up. That's what accountants are for. The only little difference is a pipe flowing in from THE FEDERAL RESERVE who can print some more and pop it in the pipe, diluting all the rest, making them less valuable by the percentage added. A little pipe is tolerable, but sometimes the pipe can get VERY big, like in a Russian Revolution.
Now this is important to me, because I reckon they are so habituated to printing, that the DOW will just carry on up its winding road to 8000 [little roller coasters notwithstanding].
How about an exposition so we can all get rich? Will they print to reduce dollar value and dollar debts [Japanese must be such suckers to hold US dollars]. At the moment, it looks like a competitive printing, Japan printing real fast.
NGW |
