4 ms·

Also, with many trillion dollars of money printed recently vs 0 CNY, it is very likely that the value of the USD will slide significantly compared to RMB. It i

Also, with many trillion dollars of money printed recently vs 0 CNY, it is very likely that the value of the USD will slide significantly compared to RMB. It is not that far-fetched to think that in a not so distant future China consider the USA (and Europe) as sources of cheap manufacturing.

throwaway2037 5y ago
I am confused by this comment. "[M]any trillion dollars of money printed recently" -- are you talking about the US Federal Reserve? That isn't money printing; it is quantitative easing -- now also practiced by European Central Bank, Bank of Japan, and Bank of England. It does not cause inflation. If anything, weirdly, it appears to cause deflation. Money printing is Weimar Republic (~1920s) or Zimbabwe (2000-2010). If there was out of control "money printing", we would see unprecedented inflation. Do we see that? No. Please correct me if I misunderstand your comment. "0 CNY" -- Do you not consider expansion of credit by state-owned commercial banks equivalent to "printing money"? I do. It causes inflation through rising housing costs. (All major central banks now include housing costs in their inflation figures.) The more likely scenario of the future of "cheap manufacturing" is (near) total automation in highly developed countries with (near) zero-cost green energy. That means their carbon intensity will be very low. Thus, carbon (import/export) taxes will be very low. Why sew socks in a country with very low labour costs, but coal-generated electricity? A machine/robot can sew the same socks using green energy in a factory located 100km outside a major city in a highly developed country. As an example: Look at Fast Retailing (Uniqlo, etc.), headquartered in Japan, but truly global as a retail brand. They are a world leader in highly automated manuf. of clothes. (Same for Zara.) I can imagine they will be one of the first to aggressively "on-shore" from developing countries to Japan, where clothes will be (near) 100% robot-made. I have heard much the same about Adidas and re-shoring shoe manuf. to Germany with (near) 100% automation.
- fguerraz 5y ago
  Don't be confused, yes QE is virtual is money printing, yes it will cause either: * Inflation. * Re-evaluation of the exchange rates * Supply issues if the above two do not happen Time will tell :-) But the main reason it hasn't happened yet is because the money that has been printed (or whatever) has not made its way to the real economy yet, it has mostly gone to the financial markets. When people will try to use that money for real, that's when sh* will hit the fan
- RhodoGSA 5y ago
  Yes - we do and are seeing rapid inflation. We see rapid asset inflation across the board. Check recent commodity prices across copper, lumber, food, water etc. Everything has been rising dramatically during the period that the world has been practicing what you call 'Quantitative easing'. Inflation isn't just related to Forex if all the worlds currency's are inflating, albet just maybe faster than the USD. And the only reason the US is not inflating faster than the rest of the world is because the IMF is based in USD.
  - dragonwriter 5y ago
    > Yes - we do and are seeing rapid inflation. No, we aren’t. > We see rapid asset inflation across the board. “Inflation”, without modifiers, refers to consumer price inflation (final goods and services). Asset inflation is a different thing, as is monetary inflation. Monetary inflation can contribute to both asset inflation and consumer price inflation, but those two outcomes are somewhat in tension; asset inflation isn’t pent up potential for consumer price inflation, but an explanation for why consumer price inflation isn’t happening and isn’t likely to happen without change in the fundamental economic processes. Specifically, monetary inflation driving asset inflation but not consumer price inflation is a sign that the money is going to people is marginal use of additional access to money is to invest rather than spend, absent changing the distribution, the outcomes aren’t going to change.
    - rllearneratwork 5y ago
      have you seen the prices of housing, healthcare, childcare, education and retirement for over the last 5 years?
      - dragonwriter 5y ago
        > have you seen the prices of housing, healthcare, childcare, education and retirement for over the last 5 years? “retirement” isn’t a good or service. Childcare has inflated slightly faster than general inflation over the last 5 yeara (2.22%/yr vs. 1.86%/yr). Healthcare has inflated a bit faster (medical care @ 2.46%/yr, hospital and related services @ 3.89%); health insurance, has been notably higher (in large parts due to the federal government failure to follow the law on the ACA) @ 5.98%/yr. Education has inflated much more rapidly than general inflation, @ 29.15%/yr. So, what? That’s how aggregates work. Obviously, we could just as easily find a list of consumer goods and services where inflation is lower than general inflation. That wouldn’t prove that inflation is even lower than reported, and neither does higher inflation in some sectors prove that inflation is higher than reported.

throwaway2037 5y ago

I am confused by this comment. "[M]any trillion dollars of money printed recently" -- are you talking about the US Federal Reserve? That isn't money printing; it is quantitative easing -- now also practiced by European Central Bank, Bank of Japan, and Bank of England. It does not cause inflation. If anything, weirdly, it appears to cause deflation. Money printing is Weimar Republic (~1920s) or Zimbabwe (2000-2010). If there was out of control "money printing", we would see unprecedented inflation. Do we see that? No. Please correct me if I misunderstand your comment. "0 CNY" -- Do you not consider expansion of credit by state-owned commercial banks equivalent to "printing money"? I do. It causes inflation through rising housing costs. (All major central banks now include housing costs in their inflation figures.) The more likely scenario of the future of "cheap manufacturing" is (near) total automation in highly developed countries with (near) zero-cost green energy. That means their carbon intensity will be very low. Thus, carbon (import/export) taxes will be very low. Why sew socks in a country with very low labour costs, but coal-generated electricity? A machine/robot can sew the same socks using green energy in a factory located 100km outside a major city in a highly developed country. As an example: Look at Fast Retailing (Uniqlo, etc.), headquartered in Japan, but truly global as a retail brand. They are a world leader in highly automated manuf. of clothes. (Same for Zara.) I can imagine they will be one of the first to aggressively "on-shore" from developing countries to Japan, where clothes will be (near) 100% robot-made. I have heard much the same about Adidas and re-shoring shoe manuf. to Germany with (near) 100% automation.

fguerraz 5y ago
Don't be confused, yes QE is virtual is money printing, yes it will cause either: * Inflation. * Re-evaluation of the exchange rates * Supply issues if the above two do not happen Time will tell :-) But the main reason it hasn't happened yet is because the money that has been printed (or whatever) has not made its way to the real economy yet, it has mostly gone to the financial markets. When people will try to use that money for real, that's when sh* will hit the fan
RhodoGSA 5y ago
Yes - we do and are seeing rapid inflation. We see rapid asset inflation across the board. Check recent commodity prices across copper, lumber, food, water etc. Everything has been rising dramatically during the period that the world has been practicing what you call 'Quantitative easing'. Inflation isn't just related to Forex if all the worlds currency's are inflating, albet just maybe faster than the USD. And the only reason the US is not inflating faster than the rest of the world is because the IMF is based in USD.
- dragonwriter 5y ago
  > Yes - we do and are seeing rapid inflation. No, we aren’t. > We see rapid asset inflation across the board. “Inflation”, without modifiers, refers to consumer price inflation (final goods and services). Asset inflation is a different thing, as is monetary inflation. Monetary inflation can contribute to both asset inflation and consumer price inflation, but those two outcomes are somewhat in tension; asset inflation isn’t pent up potential for consumer price inflation, but an explanation for why consumer price inflation isn’t happening and isn’t likely to happen without change in the fundamental economic processes. Specifically, monetary inflation driving asset inflation but not consumer price inflation is a sign that the money is going to people is marginal use of additional access to money is to invest rather than spend, absent changing the distribution, the outcomes aren’t going to change.
  - rllearneratwork 5y ago
    have you seen the prices of housing, healthcare, childcare, education and retirement for over the last 5 years?
    - dragonwriter 5y ago
      > have you seen the prices of housing, healthcare, childcare, education and retirement for over the last 5 years? “retirement” isn’t a good or service. Childcare has inflated slightly faster than general inflation over the last 5 yeara (2.22%/yr vs. 1.86%/yr). Healthcare has inflated a bit faster (medical care @ 2.46%/yr, hospital and related services @ 3.89%); health insurance, has been notably higher (in large parts due to the federal government failure to follow the law on the ACA) @ 5.98%/yr. Education has inflated much more rapidly than general inflation, @ 29.15%/yr. So, what? That’s how aggregates work. Obviously, we could just as easily find a list of consumer goods and services where inflation is lower than general inflation. That wouldn’t prove that inflation is even lower than reported, and neither does higher inflation in some sectors prove that inflation is higher than reported.