Another current events discussion

[Science Abuse]

Less politicaly charged. This is Economics. Everyone's heard about how China keeps their currency artificialy worthless, and it gives them a hell of an advantage on the world market. But think, if China were to suddenly say "Ok you guys, you win, we're floting our currency, we'll play fair now"...How fucked would we American consumers be?

 

Discuss

[Boost-n-Juice]

Good bye Harbor Freight

[copperhead]

I would think that it would no longer be worthwhile to buy chinese crap, and we would start producing more domestically to make up for it. I'm not so sure that it would affect the prices of goods made here, but that's hard to tell without actually seeing this situation happen. But, I'm pretty sure that it would mean more jobs in all of North America.

[Drunkendubber]

The middle and lower classes would be affected, they would blame it on the gov. the dems would blame the reps for causing the change and putting people in such a situation, reps will blame the dems for coddling the poor and creating a dependant society, nothing either side does will fix anything, 2-5 years later the market will have rebalanced itself and life will be normal he said/she said BS once again. HORAY for economics

[Science Abuse]

But, I'm pretty sure that it would mean more jobs in all of North America.

Incorrect, it would mean more jobs for other southeast asian nations who's currency is naturaly crap. Vietnam is already sniping what it can from China.

 

you are correct, it would no longer be fruitfull to outsource your production to China. Some US based companies simply could not afford to bring all that tooling and such over here. In many cases, the Chinese factories actualy own the tooling. You dont just move production back over here, it's hugely expensive, trust me, I have very specific knowlege in this feild.

 

So, for the period of time that buisnesses are sinking and swimming, we'll all be paying a premium for the Chinese goods, whatever percent their currency had risen, and there are ALOT. You'd be hard pressed to go a wek without using something produced or handled by the PRC. So immediately your costs go up. After everything settles, US companies are producing, you're costs are still up because it costs more to produce this stuff in the states. You have to pay people more, you have to take care of them, you have environmental regulations. So, overall, we're looking at a perminent price increase for our clothes and stamped metal products, etc etc. the buisnesses that survive, in the long run, wont feel the pinch. In fact, they'll be better off. The costs get passed on to the consumer. If they can afford the costs of moving over here, they'll be in a great position to make a good hunk of cash. Hopefully, with the increased market share, they'll hire more, but you can't predict or count on that.