Friday, December 18, 2015

Playing China's Devaluation as an Importer

China is racing to the bottom against everyone else's currency, a goofy plan well elucidated here:
Market observers usually cite exports as the major reason for a cheaper currency. In theory, prices for Chinese goods would become cheaper on international markets so volumes would pick up.
But people miss the point...  this is in conjunction with interest rate cuts...  so Chinese vendor financing of USA importers is the game to play.  As usual, cheap labor is sheer nonsense, cheap management gathering cheap credit and vendor financing backing USA importers with solid markets.

Worked great for WalMart as it hollowed out the USA economy.  Now it is small businesses' turn to reverse the process, starting by importing toasters from China, then restart making them in USA as China runs out of play.

Feel free to forward this by email to three of your friends.


Anonymous said...

China also wants to replace their workers with robots:

China needs advanced robotics to help balance its economic, social, and technological ambitions with continued growth.

Walmart will probably use robots in the US eventually as well, thereby further hollowing out the US economy.

Anonymous said...

It's not just China, but in the West as well: