The Have or Have Nots at the G-20 in South Korea

October 28, 2010

The world appears to be divided between nations that have spent too much and those that save.

In China, people that hold onto money are called “Iron Roosters”. In the US, we call people who save stingy or skin flints or other insulting terms. The average saving rate among Chinese is about 40%, while the average family in the US carries several thousand dollars in credit card debt.

According to the Wall Street Journal, the US is among the ‘Have Nots’. In G-20 Deal to Curb China is Weakened, Evan Ramstad and Bob Davis said that “China, Japan and Germany all have surpluses; the U.S. has a deficit.”

However, the US is not alone. “Australia, Canada, Britain and France, all of which have current-account deficits, lined up with the US” to pressure China to let the value of the yuan rise.

The US and other Western nations that have overspent need to export more products to other countries and import less.  For this to happen, the US dollar must be worth less than the Chinese yuan to pressure U.S. consumers to stop buying products made in China when prices for those products become higher than what is manufactured in America.

This means that countries with money in the bank want to rely less on exports for growth and more on homegrown demand instead of buying more products from the debt-ridden nations.

Germany’s current account surplus is about 6%, Japan’s 3% and China is at 4.7%. The U.S. is running a 3.2% deficit, which should be no surprise.

It appears that China won this round and will not loosen controls on the value of the yuan yet.  The US went into the G-20 summit in South Korea wanting to punish China for US consumer appetites to buy cheap foreign made goods.

Instead, little was accomplished.

It’s all about the national interest of each nation, and China and America have opposing interests.

If America wins, China loses.

In fact, whoever, wins this global currency war will be the stronger for it. The question is, Will the Iron Rooster win or the Buy Now Pay Later nation?

See Democracy’s Economic Roller Coaster


Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Making China the Goat Again

June 29, 2010

China’s currency policies continue to ruffle feathers.  Robert E. Scott writes in the Huffington Post that US lawmakers must force China to raise the value of the yuan by 40% so jobs will materialize in America.  He claims that China is responsible for 1 million displaced jobs and must be punished economically with high tariffs if they don’t comply.

What he doesn’t mention are the jobs lost to the subprime mortgage crises, which almost sunk GM and Chrysler along with plummeting real estate prices, a storm of bankruptcies and endless foreclosures—not counting the trillions added to the national debt to bail out banks. 

He doesn’t mention that more than 10 million US jobs go to illegal immigrants who flood across America’s southern border to work for low wages.  He doesn’t mention NAFTA, which took another three million US jobs to Mexico and Canada.

He also doesn’t mention the 20 to 40 million Chinese who lost their jobs and tens of thousands of Chinese factories that closed due to the same subprime mortgage crises that was caused by US Wall Street banking greed and lax government oversight when G. W. Bush was president.

My question is, “Mr. Scott, why are you making China the lone goat for America’s debt crises and job losses?” 

Why not mention all the other low wage countries that manufacture products sold in the US—the list is long. I bought something made in Haiti recently, and it wasn’t art. Does that mean someone in Haiti took a job from someone in the US?

Why not ask Americans to stop buying iPods, iPads, Macintosh, Dell, and HP since most of these products are assembled or manufactured in China or other low wage countries.

Why not ask Americans to stop buying from the likes of Wal-Mart or mention how many Americans have jobs because of high-end American products that Chinese consumers buy.

See A Stable Basket of Cash


Lloyd Lofthouse,
Award winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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