• RSS Ludwig Von Mises Institute of Austrian Economics

    • An error has occurred; the feed is probably down. Try again later.
  • RSS Republican Liberty Caucus

    • An error has occurred; the feed is probably down. Try again later.
  • RSS Freedom Watch

    • An error has occurred; the feed is probably down. Try again later.
  • RSS Free Talk Live

    • FTL Digest 2017-05-24
      Free Talk Live's Daily Digests feature highlights from our full-length seven-day-a-week live radio show, selected and edited by Riley Blake. Enjoying the digests? Please donate $5-10 per month to Riley via this link: https://www.patreon.com/crblake86 If you want to donate via bitcoin, you can do so at the following address: 1NytDNA14UcYsvzX5DHhzowGCqNou […]
    • Free Talk Live 2017-05-25
      Congressional candidate assaults a reporter :: Bitcoin wallets :: Cryptocurencies :: Objections to libertarian ideas :: Welfare and a libertarian society :: Obesity in Oklahoma City :: Scott the Bigot :: Social Security :: NFL, military and hero worship :: Corporate welfare :: Are women taking over the Military Industrial complex? :: Open Carry :: Bitcoin :: […]
    • FTL Digest 2017-05-23
      Free Talk Live's Daily Digests feature highlights from our full-length seven-day-a-week live radio show, selected and edited by Riley Blake. Enjoying the digests? Please donate $5-10 per month to Riley via this link: https://www.patreon.com/crblake86 If you want to donate via bitcoin, you can do so at the following address: 1NytDNA14UcYsvzX5DHhzowGCqNou […]
  • RSS Break the Matrix

    • An error has occurred; the feed is probably down. Try again later.
  • RSS Schiff Radio

    • The Dollar’s Decline Is Only Just Getting Started – Ep. 250
      Summary:  The dollar’s decline really started with the Fed’s too-little-too late rate hikes.  The rally of 2014 – 2015 was fueled by expectations of more aggressive Fed monetary policy that did not materialize. We’ve been trending sideways since then with the exception of an upward spike after the Trump victory.  Now, as much of the […] The post The Dollar’s […]
    • Will Republicans Dump Trump for Pence? – Ep. 249
      Summary: Republicans face chaos around Trump’s political difficulties, causing some to consider potential advantages of a President Pence.  Market volatility has not yet brought the DJIA below pre-Trump numbers while the dollar index slides and gold moves up. Meanwhile, household debt is higher than 2008 levels even as fewer Americans own homes. It looks lik […]
    • Fed And Markets Excuse Retail Bloodbath – Ep. 248
      Summary: The retail sector is in worse shape today than it was in 2008 during and immediately following the financial crisis. Retailing has been responsible for 10% of the jobs gained during this so-called recovery. Clearly part of the problem is the increase in minimum wage.  Why are retailers adding so many jobs when their […] The post Fed And Markets Excu […]
    • Fantasy Trumps Reality – Ep. 247
      Summary: Trump fantasy persists in the face of weakening economic data, health care and tax reform uncertainty. The reality is that the damage done to the economy will not right itself just because Trump has been elected and we are in for a wild ride whether or not President Trump decides to do the right […] The post Fantasy Trumps Reality – Ep. 247 appeared […]
    • Fed Dismisses Weak Data to Posture for Another Rate Hike
      SchiffReport recorded Saturday, May 6 On Wednesday of this week, the Federal Reserve against a rate hike in May But based on their official statement, the market assigned a much higher probability To a rate hike coming in June In fact, following Friday’s slightly better-than-expected Non-Farm Payroll report, the probability of a June rate hike […] The post F […]

Blaming China for our Problems

Last week president Obama met with China’s president Hu Jintao in what ended being a huge propaganda piece for the media.  Obama said that he’d like to see China’s currency, the yuan, appreciate at a much faster rate.  In his eyes, this would increase the quality of living for Chinese citizens and help our trade imbalances with the country.  At least Obama got one thing right.  Allowing the yuan to appreciate would definitely help improve the lives of Chinese citizens, but it’s a complete joke if we think this will help our trade imbalances.  As usual, Obama talked a lot of talk to make it sound like the US is giving China prudent economic advice, like we’re the ones calling the shots.  Talk about biting the hand that feeds you (literally)!  Behind the scenes I’d imagine that Obama is begging China to keep financing our debt and selling us cheap goods.  If they stopped buying our government bonds, this hole charade we call government would default so fast it would make anyone’s head spin.

Fed and Treasury Total Money (FTTM)

Another common complaint from economists and politicians in Washington is that the Chinese are currency manipulators.  This is also a misconception that places that blame on the wrong people.  The Chinese have pegged their currency to ours so that their product manufacturers and exporters can maintain some level of stability (we are the biggest buyers of Chinese products).  Thus, it is really us who are the currency manipulators thanks to the loose and reckless monetary policies of the Fed.  If you want to see an example of currency manipulation, check out the chart of our aggregate money supply!   As Bernanke continues to pull  the dollar down into a ditch, so does he pull down the yuan.  An unfortunate side effect of our money printing is that we are exporting our inflation to China and they are seeing food prices at an all time high.  This combined with the fact that the average Chinese citizen spends 50% of their income on food is causing lots of consumer frustration and even riots in some instances.

If the Chinese allow their currency to appreciate, their citizens will see a rise in their standard of living, but at the same time we will see a decrease in ours.  The US economy desperately relies on cheap goods from the Chinese and if all of a sudden more products are being consumed by Chinese citizens instead of being shipped abroad, that’s going to cause lots of problems for us.  We no longer have the manufacturing base that we once had, so it will be hard to find replacements for Chinese imports that are more expensive as the US consumers competes against the Chinese consumers on a more even playing field.  Once our standard of living starts to decrease, we better realize the cold hard truth that we desperately need to rebuild our manufacturing base and start exporting stuff once again.  However, as it currently stands, we are one of the most uncompetitive environments for creating new businesses, and if you consider manufacturing it’s even worse.

Therefore, Obama must be dreaming if he believes that having the Chinese yuan appreciate will solve our economic woes.  When the Chinese consumers have more purchasing power, they’ll just buy more of the stuff they already produce and there will be less of a pie for us since we have no pie to offer them.  The sooner the Chinese ditch their currency peg, the better off they’ll be.  We’ve been dragging them down by our reckless monetary policy for too long, and I’m hoping we’ll soon come to terms with this and start figuring out how to get our economy back on track.  An economy that no longer produces anything is one that’s not destined to last for too long, especially when the world rejects our inflated currency.  The only culprit that Obama should blame for our economy woes is ourselves, and more specifically our out of control Federal Reserve combined with our stifling regulations on business.  We need to once again make this nation the most free country in the world for not only civil liberties but also economic ones.  Freedom is the only solution, not blaming others.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: