Imagine if tomorrow the United States' government declared that all tariffs would be reduced to zero for Chinese made products. Any quotas and all other trade barriers would be removed.
Oh, and the exchange rate for the CNY/USD would 4.0/1.00 rather than 6.85/1.00.
Would you consider this "free trade?" and if you would not, then why do we consider "free trade" with China at an exchange rate fixed by Beijing to be "free" trade?
2. I forgot what else I was going to say. The Jager is hitting now.
p.s. Still for free trade, and technically, yeah, if China wants to subsidize my consumption fine - just worried about secondary effects:
a. Lower interest rates than normal due to Chinese monetary sterilization - and what that entails...
b. Chinese over-investment in production - this is not good for them either.
c. The re-balancing that might have to take place - I am not the man who wants to teach mortgage brokers how to run a CNC-lathe. Now, teachers rich Chinese consumers to buy rounds of Jagermeister, ab-master 2000, and juicers....
1 comment:
LOL. Nice comments.... you should drink more Jager.
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