On Sep 27, 2010, at 9:06 PM, Anthony wrote:

Mish is predicting a currency / trade war with China, but he seems short on details.   How will this unfold in your opinion?   I assume we will exchange tariffs ( I think China threw a tariff on Chicken),  but I'm not sure how the currencies will play out.  Will it be a race to devalue the currency?  How will this impact importers?   What happens if you submit your factory order before a tariff is applied?  or Order then the currency plunges?

Anthony

USA policy is to not let USA consumers enjoy lower prices from China.  USA policy is to demand China pay more for USA products.  The chicken tariffs should show the USA govt what happens when prices go up: buyers look for alternatives.   As the Chinese communist party banker says sensibly, USA needs to get its finances in order.  True true.  

I don't think much of anything will happen.  China will not comply, and USA can do nothing about it.  Elections are coming up, and politicians are posturing to look good to voters: blame some one else for our problems.  

Slowly but surely our standard of living will degrade.  The powers that be in USA prefer to rule over ruins than serve in paradise.  Pensions are toast.

John

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