The Vintage group has gone and dredged up "Deep Throat" as a current juicy controversy. C'mon guys, you can do better than this!

How about Tony Blair's most recent comments about democracy, and how we don't have the corner on the market?

Or the quite interesting political wrangling going on regarding China and their pegged yuan, and the our devaluing dollar...is there a method to this madness?

Can we debate Iraq without reverting to Michael Moorisms?

 

Welcome home Cordy. It's been quiet around the controversy thread.

 

Thanks Rob,

It's nice to be home--I'm goin' to bed!

 

Cordy, I'd like to hear more about what's going on against the Chinese currency.

And, no, it appears we can't really debate Iraq here without raising hackles. Sorry. I think this is understandable but lamentable.

 

What is going on with the Chinese currency? I have not seen any news in a while. Fill me in.

 

The Chinese, for a great number of years, have pegged their currency to ours. Theirs is at a ridiculously low rate. This does a few things--their goods are sold at a low price worldwide, which does a lot to explain their 9.5% growth this year. It also means that the Chinese government has artificially lowered the cost of labor in China--nice to their own people, aren't they? China is like MANY other countries in that they also regularly buy US treasuries, which are stable for them and helps our debt load.

We've tried to get them to float their monetary rate, or re-value where they peg their money for a quite a while, and they refuse. The U.S. and other countries hoped that when China entered the WTO that things would change as well, but they haven't.

Now our dollar has devalued over the past two years. Everyone is screaming for us to strengthen the dollar and for the Chinese to float their currency. China has just come out and said that the U.S. currency is no longer the stable platform that is has been for eons, and that they may peg their yuan to the Euro or the Yen.

Now, the weak dollar helps U.S. companies to an extent, because exports become "cheaper", and therefore more competitive in the world market. However, if the dollar sinks too low or is seen as unstable, China, Japan and many European countries will stop buying our debt in the form of US treasuries.

My question is: how much of this wrangling is in our control, and how much is not? Again, a weak dollar can help us up to a point, and there has been quite a bit of political sword rattling from other countries, trying to get us to strengthen the dollar. I haven't seen us doing much more than giving lip service, which tells me that the gov't wants the dollar where it is right now.

I'm not an economist, so I may have made this a cloudy topic.

 

No, not cloudy at all, Cordy. My problem with this is how can we possibly strengthen the dollar when our gov't is spending like nuts to finance worldwide conflicts. Oh, sorry, I think I've dived back into politics.

 

Just kidding. I think it would be insanely difficult to be the decision makers in the government (the ones that really try to make real decisions). Hopefully they know a lot more of the inside info than we do and whatever decision they make teters the balance of all of that info. Whatever decision is made, the affect ripples so far out who knows what is affected. I often wonder why we don't become isolationists. But then I think, what will those ripples bring??

 

Chazmo,

I'm waiting to see that myself. My "ideal" government would have the media in a frenzy over the "slash and burn" tactics. I don't think I'm going to see it in my lifetime...

There are two hopeful points--I've heard that there actually will be spending cuts this year--can't wait to see that. Also, it seems that the budget the Admin sends to the House is quite different than the budgets of old--the budget is submitted with VERY LITTLE discretionary spending included, so Senator Byrd doesn't get to institute his favorite new highway project (road to nowhere), and the mating habits of the spotted African tse tse fly, in Africa, goes unseen for yet another year.

Finally, the thing that affect money more than the government, American business, hopefully has a good year ahead. No financial scandals or unforseen terrorist events would be nice...

 

I wish I could be optimistic about business, Cordy. I think I have my head up my patootie right now watching my own company flounder, but I don't see job creation up my way. I just see downsizing. It's totally in contrast to the stats being quoted by the gov't.

Good, discretionary spending needs to go.