also check me out on www.facebook.com and twitter.com
Tags: dollar, KRUGMAN, Paul, Paul KrugmanDollar, Paul Krugman
Posted by admin on October 12th, 2010
Posted in Depression Videos 
Posted in Depression Videos Categories
Depression (2149)
- Depression Articles (77)
- Depression News (681)
- Depression Q and A (123)
- Depression Videos (400)
- Depression Cure (122)
- Manic depression (535)
- Symptoms of depression (495)
Wow! What a good idea....I want to see Peter debate paul. I totally agree with Peter on the US treasury and dollars things. It is crazy to think that US government can buy back their own bond is China dumps our bond without any consequences.
If that works, Zimbabwe would be the richest country in the world by now!
Schiff does not understand the liquidity trap or the balance of payments. The reason china does not consume it production is a high savings rate.
Schiff does not understand the liquidity trap or the balance of payments.
supply creates its own demand???? lol @ ppl still believing supply-side economics
I can't believe there are people on this thread who ask who Peter, or indeed anyone, is to question the Great Krugman.
I think what the last 3 years should have taught us is not to have unquestioning trust in authority figures of any type.
Oh and if you don't believe supply creates demand. Ask yourself how much demand there was for sliced bread in 1800, or iPod in 1995 or cars before Ford drove down their price.
@Gasolinealley00 I listened to what he said. However, in the long term we cannot continue to invest in other countries and to keep the dollar so strong that it doesn't make sense to buy from us, but rather to sell to us. Not exactly a radical concept.
@Gasolinealley00
Yes, no doubt China can afford them, but the chinese people can't. They need to redistribute their money before they can move to self-sustained demand. This will take time.
No-one is saying, that 1,3 billion chinese can't afford to purchase most anything as a whole, but they don't YET have a market for it. The redistribution will take time else there be huge uproar. Later, sure. But not yet. NOW they need to uphold the current global system.
@stillsmashin You are 100% correct. I don't know why this is so hard for people to understand. The Chinese people need to be allowed to keep their money in order to buy what they produce, instead of paying for the extravagances of this unproductive country. I have no idea why anyone would think China is missing demand. Do they think the Chinese like labor and no benefits? They just like being slaves? Oh well... I think Schiff's comparison to the Witch trials pretty much explains.
@eshnajizzle He's not saying people don't win with trade at all. He's saying people lose (specifically the Chinese) by being forced lend their hard earned money to Americans, so Americans can pay for the goods that the Chinese produce. The fact that the Chinese can afford to pay for our debt proves that they indeed have the productivity to purchase their own goods. They just need to be able to keep their own money. They work hard and yet they aren't allowed to reap the benefits of their work.
@Zakdayak Did you even listen to what he just said? He just explained EXACTLY how that is not true, how do you not see this? I almost felt compelled to explain this to you, but i shouldn't have to, it's IN THE VIDEO.
@PresidentRich Unfortunately for us, Krugman has a "personal policy" that he won't do any debates. He's a complete moron, and that tells us he's afraid of people figuring that out.
I was with him until he talked about the value of the dollar...I do think the dollar is too strong and is getting in the way of Americans buying American...but certain people, like Walmart Executives, are profiting from this...
@eshnajizzle
@fringeelements
There's very little with which we're in disagreement. I'm not arguing that china's wealth isn't enough to purchase their own products; of course they can do that. Money is indeed just a medium, but its distribution has to be agreed upon as well. At the moment it is lumped together into the hands of the richest few, who have very few aspirations for further consumption. The poor would buy, but they don't have the money. So china has to sell out of the country, or produce less.
Chinese firms are producing stuff in exchange for US paper. US paper runs out. But chinese still have productive capacity, and trade occurs within china. Factories mass produce for masses. Capitalist pays workers to work. Workers at all stages get wages, with which to buy say 95% of what is produced, capitalists get 5%. Demand is not a problem. Money is just medium of exchange. Money represents goods. If dollar falls the dollar's share of pie falls, yuan rises, chinese become demand. Dumbass.
China has the money, but it doesn't have the demand. The money is disproportionately distributed. As long as the money is pooled with a few rich individuals, china's demand is constrained.
One can only buy so many toys before one gets bored of them (eg. 2). Between you and your four friends you have the money to buy 5, but you own 4/5 of all the money. You buy 2. Your friends buy 1 combined. All in all you've bought 3, though you could have afforded 5. That's china's issue with consumption.
Schiff speaks comment sense from a man who is a successful business man. Krugman is a socialist academic economist. Yes Krugman has some points to make, but in the long run Schiff is correct. And he has demonstrated this when he said the house price bubble would pop!.. Krugman just wants his silly socialist economic ideas to work for perpetuity. Well the world just doesnt work that way because an academic says so!
@eshnajizzle
China does have the demand; China has the largest population in the world.
if the US stops buying Chinese products the price will fall and the Chinese will be able to afford what they consume.
If they can produce it, then they consume it, duh.
If you, personally, can make a toy, then obviously you can play with it.
Thoughts: First, he's way over estimating the amount of dollars China has. It's only $800 billion, which sounds like a lot. But remember, just last year the Fed purchased $300 billion in long term T-bills and it didn't affect long-term interest rates at all. Investors have a price-point they're looking at and they stick to it. Second, Israel reduced the value of their economic currency to boost exports and it worked. That's Europe is trying to do now (though the euro went down on its own).
And, actually, when he says China would not sell, if their currency revalued: it's the same thing as the Dollar inflating. It actually proves, what Krugman was saying.
The final, definitive proof that Schiff has no grasp of economics is his claim at 7:53 - that it's crazy to claim China is dependent on exports and that actually China would be better off consuming its own production.
China does not have the demand for its own products, the US and others do. It is basic theory of trade that it is not a zero-sum game. Everyone wins with trade.
" 'They're mainly determined by market expectations of future short-term rates.' No they're not! - - are about long term expectations of inflation. "
They're both right and wrong: long term rates are dependent on both, or more precisely their relationship.
[Expected future short-term rates] / [Expected inflation]. This is in essence the expected economical climate, expected real opportunity cost.
@PresidentRich
Schiff would get flattened!! He wouldn't realize it, though... Too bad it won't happen, as Krugman can't debate just anyone with economic claims based on no numbers...
@rjksoccer06 That is even more true, considering that there is no Nobel prize in economics. I don't know where that idea ever came from. The Swedish Central Bank created a prize back in 1968 and it was created to celebrate the 300 year anniversary of the Central bank itself. The prize is also paid by the Central Bank itself, not the Alfred Nobel Foundation.
We need two people now more than ever, Thomas Jefferson and Ludwig Von Mises. 1776 or 1984, take your pick.
Paul Krugman's entire thesis of "the rich getting richer at the expense of the poor, via tax cuts" is "junk economics."