India refuses to side with US on trade imbalances

[Chinese-Dragon]

I see the whole global financial crisis was in part due to over spending by the west for decades, instead of boosting it's economy USA spent over $1 trillion in Iraq and Afganistan wars. It still maintains a $680 bn annual defence budget even with it's current trade deficit, Obama could not have chosen a worse time to be president.

Agreed.

I do feel sorry for Obama sometimes. When he was elected, he inherited an economy that was falling apart. And despite his best efforts, he hasn't managed to fix it.

The worst-case scenario for America right now, is to have a "lost decade". Like what happened to Japan during the 1990's (they also suffered from an asset price bubble collapse). That will put a serious strain on the entire global economy, for a very long time.

 

[Ras]

I don't think the USA is in the economic position to start a trade/currency war at the moment.

It's the USA that is at risk of a double-dip recession. We are not.

That is where you are wrong..America is still a 13 trillion economy with 310 million people compared to China with 5 trillion and 1.4 billion.
China cannot afford to not grow..America can.

 

[Ras]

I see the whole global financial crisis was in part due to over spending by the west for decades, instead of boosting it's economy USA spent over $1 trillion in Iraq and Afganistan wars. It still maintains a $680 bn annual defence budget even with it's current trade deficit, Obama could not have chosen a worse time to be president.

Totally wrong..American war efforts are paid for in money to American industries. 99.9% of our military equipment is made by us.The money stays within the US.

Though I agree with the part of over spending causing the crisis...but it has nothing to do with the wars.

 

[Brotherhood]

That is where you are wrong..America is still a 13 trillion economy with 310 million people compared to China with 5 trillion and 1.4 billion.
China cannot afford to not grow..America can.

Yeah for now, who know what will happen in 2012?

November 10, 2010, 8:45 PM EST
By Vivien Lou Chen

Nov. 10 (Bloomberg) -- China may top the U.S. as the world’s largest economy in 2012, based on one measure used to compare the purchasing power of different countries’ currencies, according to a report by the New York-based Conference Board.

The Conference Board Global Economic Outlook, released today, reached its findings by using purchasing power parities, which adjust for differences in currency levels and prices between countries. A copy of the report was posted on the Conference Board’s Web site.

Emerging and developing countries will grow over the next decade more than three times faster than advanced economies, the Conference Board said. Advanced countries, for instance, will account for less than 1 percentage point of global growth through 2020, while 3.4 percentage points will come from emerging economies, it said.

China’s economy is projected to grow by 9.6 percent next year after expanding 10 percent in 2010, the report said. The U.S. is expected to expand by just 1.2 percent in 2011, down from 2.6 percent this year, the report said.

--Editors: James Tyson, Kevin Costelloe
China May Overtake U.S. in 2012, Conference Board Report Says - BusinessWeek
http://blogs.wsj.com/chinarealtime/2010/11/11/china-could-surpass-us-in-2012/

 

[Chinese-Dragon]

That is where you are wrong..America is still a 13 trillion economy with 310 million people compared to China with 5 trillion and 1.4 billion.
China cannot afford to not grow..America can.

China will keep growing no matter what anyone does. Like you said above, there is still a LOT of room to grow.

Also, bear in mind that exports to America count for only around 0.5% of Chinese annual GDP growth.

So America can declare a trade war if she wishes. I won't be happy seeing the USA go into a double-dip recession, but I can't stop you.

 

[CardSharp]

Agreed.

I do feel sorry for Obama sometimes. When he was elected, he inherited an economy that was falling apart. And despite his best efforts, he hasn't managed to fix it.

The worst-case scenario for America right now, is to have a "lost decade". Like what happened to Japan during the 1990's (they also suffered from an asset price bubble collapse). That will put a serious strain on the entire global economy, for a very long time.

After reading Stiglitz's critique of Obama, I am feeling less sympathetic about him. He continued many of the disastrous economic began by Bush and left absolute fools like Geithner and Bernanke in charge of the two most important regulatory body.

 

[Chinese-Dragon]

After reading Stiglitz's critique of Obama, I am feeling less sympathetic about him. He continued many of the disastrous economic began by Bush and left absolute fools like Geithner and Bernanke in charge of the two most important regulatory body.

That is certainly true, but I do still feel sorry for him in a way, because the economy was already in terrible shape when he got it.

At best, all he could do was fix it. Unfortunately... he hasn't been able to fix it, at least not yet.

 

[CardSharp]

That is certainly true, but I do still feel sorry for him in a way, because the economy was already in terrible shape when he got it.

At best, all he could do was fix it. Unfortunately... he hasn't been able to fix it, at least not yet.

In the end he wussed out. The reason why he kept those two around was he wasn't ready to take on Wallstreet. The removal of Geithner and Bernanke would have signal that the US government wasn't going to bail the banks out anymore and the markets would have just collapsed on that news.

In the end Obama has adapted a "do not disturb" strategy that might have avoided calamity in the short-term but will be fatal in the long term.

China will keep growing no matter what anyone does. Like you said above, there is still a LOT of room to grow.

Also, bear in mind that exports to America count for only around 0.5% of Chinese annual GDP growth.

So America can declare a trade war if she wishes. I won't be happy seeing the USA go into a double-dip recession, but I can't stop you.

I am not worried at all for China in the long term but I am terrified of the impact of the US economy on Canada (where close to 80% of its export goes). Our prime minister wants to be a puppy on a leash. He's toed the line every time America has snapped her fingers, both on Israel and the current monetary issues.

He's just blamed China for the current world economic crisis when both Germany and the UK have condemned the US for profligacy in its QE2 and beggar thy neighbour policies.

 

[SandsofTime]

Totally wrong..American war efforts are paid for in money to American industries. 99.9% of our military equipment is made by us.The money stays within the US.

Money is not true wealth, resources are. If you send troops to war you need to purchase fuel and logistics. Troops need to eat, sleep, have recreation besides the usual fighting. All this requires production and resources. The military equipment requires materials, metals, and other resources which may be imported. And here's the ultimate recipe for fiscal disaster:

1. Start prolonged wars
2. Boost money supply by printing money and hand that money to military industrial complex.
3. Military industrial complex recruits more people, pays higher salaries
4. Enriched people need to find a way to spend money all this extra money
5. Guess what goods these people will buy?
6. Oops we now have a huge trade deficit
7. Cry about currency valuations, cheap labor, unfairness of the world blah blah

Hope you get the point.

 

[Chinese-Dragon]

In the end Obama has adapted a "do not disturb" strategy that might have avoided calamity in the short-term but will be fatal in the long term.

Could you point me to that Stiglitz article, if it's available online? It sounds quite interesting.

 

[CardSharp]

Could you point me to that Stiglitz article, if it's available online? It sounds quite interesting.

I am currently reading his book,

Amazon.com: Freefall: America, Free Markets, and the Sinking of the World Economy (9780393075960): Joseph E. Stiglitz: Books: Reviews, Prices & more

It's well worth the money but he also writes a free column for the guardian which contains many good articles (include one very sensible one about how China's currency isn't the issue)

Joseph Stiglitz | guardian.co.uk

 

[Chinese-Dragon]

I am currently reading his book.

Joseph Stiglitz | guardian.co.uk

Thanks buddy.

 

[luckyyy]

Prime Minister Manmohan Singh said that there was no agreed universal diagnosis to what was ailing the global economy.

he is a statesman when it comes to economic ....

 

[Ras]

Yeah for now, who know what will happen in 2012?

November 10, 2010, 8:45 PM EST
By Vivien Lou Chen

Nov. 10 (Bloomberg) -- China may top the U.S. as the world’s largest economy in 2012, based on one measure used to compare the purchasing power of different countries’ currencies, according to a report by the New York-based Conference Board.

The Conference Board Global Economic Outlook, released today, reached its findings by using purchasing power parities, which adjust for differences in currency levels and prices between countries. A copy of the report was posted on the Conference Board’s Web site.

Emerging and developing countries will grow over the next decade more than three times faster than advanced economies, the Conference Board said. Advanced countries, for instance, will account for less than 1 percentage point of global growth through 2020, while 3.4 percentage points will come from emerging economies, it said.

China’s economy is projected to grow by 9.6 percent next year after expanding 10 percent in 2010, the report said. The U.S. is expected to expand by just 1.2 percent in 2011, down from 2.6 percent this year, the report said.

--Editors: James Tyson, Kevin Costelloe
China May Overtake U.S. in 2012, Conference Board Report Says - BusinessWeek
Report: China Could Surpass U.S. to Become Largest Economy in 2012 - China Real Time Report - WSJ

Nothing will change...the average Chinese citizen is still close to 10 times less wealthy than the avg American and even if China reaches the total size of the American economy the avg Chinese will still be more the 30% poorer than the average American.

 

[Ras]

China will keep growing no matter what anyone does. Like you said above, there is still a LOT of room to grow.

Also, bear in mind that exports to America count for only around 0.5% of Chinese annual GDP growth.

So America can declare a trade war if she wishes. I won't be happy seeing the USA go into a double-dip recession, but I can't stop you.

The devaluation of the American dollar does not just affect Chinese exports to the US. China has more than 2 trillion in dollar reserves which she has bought to keep the dollar artificially up....it is like the value of your house sinking after you paid all the money.

The Yuan is linked to the dollar...so when the dollar will sink either China has to raise the Yuan which will make her exports more expensive all over the world not just to the US or try to lower the Yuan..which is where the currency war will start.