3 minutes ago, New Buddha said:
lmao.
Yes Nicky, that’s how Free Market economics works. Surly your not so dumb as to actually believe that Mexico, the U.S. and Canada (and every other country in the world for that matter) practice Free Market economics.
We’ll continue this conversation after you inform yourself on what the law of supply and demand is.
1 hour ago, Nicky said:
We’ll continue this conversation after you inform yourself on what the law of supply and demand is.
Are you seriously saying that countries don’t devalue their currency for political reasons?
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. “Devaluation” means official lowering of the value of a country’s currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. In contrast, _depreciation _is used to describe a decrease in a currency’s value (relative to other major currency benchmarks) due to market forces, not government or central bank policy actions. Under the second system central banks maintain the rates up or down by buying or selling foreign currency, usually but not always USD. The opposite of devaluation is called revaluation.
THE opening paragraph of Bloomberg’s news story on Venezuela’s currency move is a classic example of what devaluation actually means.
Venezuelans lined up to purchase airline tickets and TVs this weekend in a bid to protect themselves from price increases after ailing President Hugo Chavez devalued the bolivar for a fifth time in nine years.
The official rate is falling from 4.3 to the dollar to 6.3; a 32% devaluation. Foreign goods will cost more. In other words, a devaluation is a decline in the country’s standard of living. Traditionally, it is a tool used by a desperate government with a poor economic policy. Venezuela, despite its oil wealth, has a 22% inflation rate, even before the latest move. Sometimes countries get trapped in a dismal cycle in which high inflation causes the country’s exports to be uncompetitive, prompting a devaluation that only leads to more inflation and so on.
1 hour ago, New Buddha said:
This is Mexico’s real problem - their monetary policy.
Ok, so NAFTA isn’t the cause.
Permitting trade generally helps everyone - it may be one thing that makes bad policy bearable for both countries.
Throwing facts around facts doesn’t mean you formed a logical position. You didn’t form an argument.
4 minutes ago, Eiuol said:
Throwing facts around facts doesn’t mean you formed a logical position. You didn’t form an argument.
Wouldn’t want facts to get in the way of a good argument.
Nicky’s understanding of economics is non-existent: Take this:
1 hour ago, Nicky said:
- American companies having access to cheap labor isn’t a bad thing. It’s a good thing, because it lowers prices for American consumers. It’s part of the reason why even “poor” Americans have comfortable lives, surrounded by the newest toys, gadgets and luxury. More importantly, it’s Americans’ RIGHT to trade with Mexicans. Donald Trump is a rights violating thug for trying to stop or tax that trade, NO MATTER WHY he’s doing it.
Devaluation of the Mexican Peso does mean that American companies working in Mexico have cheaper wages. But it also means that the average Mexican worker has less purchasing power so they have less money to buy American exports. A Mexican working at a Ford assembly plant now has to work 45 hours to earn the same purchasing power of 40 hours previously.
Currency manipulation is a race to the bottom. It hurts both Countries. And as it was pointed out in the Boston Globe story, there are no sanctions in NAFTA for punishing Mexico for devaluating their currency.
Just because the words FREE TRADE are in NAFTA, that does not mean that Free Trade is taking place. It’s not even Fair Trade. The agreement as it currently stands hurts both countries. It’s not so bad for transnational corporations, but many others suffer.
Can you explain why the GDP of Mexico (corporations) has increased, while the poverty rate is still at 50%?
On 1/27/2017 at 9:47 AM, Nicky said:
Every time Trump expresses hostility towards Mexico, the peso takes a significant tumble. This has been happening for months, so, surely, even Trump noticed the correlation by now. Whether it’s just a negotiating tactic or destabilizing the Mexican economy is his end game, he’s clearly trying to hurt Mexico, on purpose.
This above is just a mindless screed by someone who has no understanding of economics.
1 minute ago, New Buddha said:
Wouldn’t want facts to get in the way of a good argument.
I’m saying you didn’t use those facts to create an argument. It’s just a lot of facts.
2 minutes ago, New Buddha said:
Just because the words FREE TRADE are in NAFTA
You didn’t say NAFTA originally. You asked what would happen if, hypothetically, trade with Mexico were banned.
Trump has no intention of imposing a 25% import tax on Mexico goods coming into U.S. He’s forcing Mexican President Pena Nieto to the bargaining table to renegotiate NAFTA. For the good of both countries.
Pena Nieto knows that if he has to institute monetary reform (i.e. quit constantly devaluating the Peso) then he will be forced to make some tough economic decisions. Devaluation of currency is one of the oldest tricks in the books that governments use to stave off making serious, free market economic reforms (see China).
And know, that when a government devalues it’s currency, the government DOES have more money (at least temporarily) - but the citizens are the ones who get kicked in the teeth.
15 minutes ago, New Buddha said:
Trump has no intention of imposing a 25% import tax on Mexico goods coming into U.S. He’s forcing Mexican President Pena Nieto to the bargaining table to renegotiate NAFTA. For the good of both countries.
What are the one or two key things you think would be improvements to NAFTA? Do you mean Mexico agreeing not to devalue its currency, or something else?
1 hour ago, softwareNerd said:
What are the one or two key things you think would be improvements to NAFTA? Do you mean Mexico agreeing not to devalue its currency, or something else?
The real problem is that we need to get out of all multi-lateral trade agreements, and only enter into bi-lateral trade agreements. When you have three vastly different economies, such as NAFTA, with varying degrees of taxation, regulation, health care systems, monetary policy, etc. AND you have transnational corporations with businesses in all those countries, then it’s too easy for those companies to game the system.
As I noted, the Peso devaluation (shortsightedly) helps U.S. importers (Automotive) but it hurts Mexican workers and U.S. exporters (agriculture, etc.). Mexico’s GDP has increased six-fold, and yet 50% of Mexicans still live in very real, third-world poverty. For the first time, remittance (money sent back from the U.S. to Mexico by Mexicans [legal and illegal] actually accounts for more money than Mexico’s Oil export income. That’s not good for either country.
But, the U.S. also needs to drastically reduce corporate taxes, force health care providers to compete across state lines, promote Catastrophic Health Care insurance plans and portable health care saving accounts, quit forcing needless regulations on companies and end the global warming war on energy. All of these are things that Trump has set into motion.
I truly don’t understand all the frothing at the mouth by the anti-Trump yahoos on this forum. The fact that he got into office without being bought-and-paid-for by the donor class (which includes the Republican establishment) should give us all hope.
So far, I’ve seen little wrong with what he’s put into motion this first week.
The press takes him literally, but not seriously; his supporters take him seriously, but not literally. - Salena Zito, The Atlantic.
Trump reminds me of every developer that I’ve worked with over the last two decades. Huge, bullying, Alpha-male egos. And you cringe every time he goes in front of a design review board, city planners or neighborhood organizations. But when you are one-on-one with him in a conference room, he’s completely different. Very loyal. Developers are born negotiators. I’ve many times presented horrible designs to neighborhood committees - which get shot down - only to come back and present the design that we wanted all along. The committee feels that they won!
3 hours ago, New Buddha said:
Are you seriously saying that countries don’t devalue their currency for political reasons?
I’ll respond as soon as you learn about the law of supply and demand, and correct your mistake above. If you’re not willing to do that, then there’s no point in talking to you.
9 minutes ago, Nicky said:
I’ll respond as soon as you learn about the law of supply and demand, and correct your mistake above. If you’re not willing to do that, then there’s no point in talking to you.
I don’t really care if you respond or not Nicky. I’ll sleep just fine tonight.
1 hour ago, New Buddha said:
So far, I’ve seen little wrong with what he’s put into motion this first week.
Not necessarily wrong in principle, no, but it’s hard to say that much of his policy in fact uses anyone’s existing knowledge. He acts as if -no one- has taken the time to think about economics issues, therefore we need to finally look into it. All he has is intuition for real estate development. Not that a rational improvement to NAFTA doesn’t exist, there’s just no plan I know of from Trump.
We KNOW he doesn’t read books. We KNOW he is prone to exaggeration and flip-flopping (read: lying). I don’t have a reason to suspect that any resulting plan will be rational, as long as Trump is at the helm. I don’t care that he has an ego, no one here should. I care if he has the ability to develop rational plans, or the ability to recognize them.
Renegotiating as you suggest NAFTA or replacing it is, generally speaking, probably a good idea. But, that doesn’t mean the terms will necessarily be rational. There’s all the reason to think Trump WANTS tariffs and protectionist policies, both of which are anti-capitalist. I don’t think anything going on about Mexico is good intentioned. Trump treats it as though the US is under assault by the Mexican army. He’s not treating the goal as making the US a better trade partner or ally to pro-capitalist Mexicans.
13 minutes ago, Eiuol said:
Trump treats it as though the US is under assault by the Mexican army.
Let’s hope that Pena Nieto thinks so too! Then maybe he will quit forcing Mexico down the drain hole to poverty by pursuing a horrid, disastrous monetary policy that’s crippling Mexico!
It’s called negotiation, Eiuol. You know, the Art of the Deal…
15 minutes ago, New Buddha said:
Let’s hope that Pena Nieto thinks so too! Then maybe he will quit forcing Mexico down the drain hole to poverty by pursuing a horrid, disastrous monetary policy that’s crippling Mexico!
err, do you mean that it’s true that the US is under assault, or do you mean it’s a lie but a negotiating tactic?
Lying is only okay if used against criminals, and otherwise evil people.
10 minutes ago, Eiuol said:
err, do you mean that it’s true that the US is under assault, or do you mean it’s a lie but a negotiating tactic?
Lying is only okay if used against criminals, and otherwise evil people.
I mean that Mexico’s President Enrique Pina Nieto is a chicken-shit, weak-minded, rich politician that will sell his people down the river in order to remain in power - in lieu of doing what is necessary to set Mexico on the path to prosperity.
Should we also coddle North Korean’s Kim Jong-un and the leaders of Iran?
Really?
Edit: The U.S. defied the “Diving Right” of a King, Eiuol…
37 minutes ago, New Buddha said:
I mean that Mexico’s President Enrique Pina Nieto is a chicken-shit, weak-minded, rich politician that will sell his people down the river in order to remain in power - in lieu of doing what is necessary to set Mexico on the path to prosperity.
Be that as it may (I think you also described Trump, especially the weakminded part [anti-intellectualism] ), does that warrant lying?
Kim Jong-un is substantially worse, an actual dictator.
Anyway, you are presuming Trump is seeking a pro-capitalist deal. I think he’s seeking a protectionist deal. Do I have a reason to think he’ll make a smart, pro-capitalist trade deal?
11 minutes ago, Eiuol said:
Do I have a reason to think he’ll make a smart, pro-capitalist trade deal?
How the heck would I know? Or care? Think what you will think.
49 minutes ago, New Buddha said:
How the heck would I know? Or care? Think what you will think.
Because you (seem) to have some reason to think he will. Also because having a debate/argument implies wanting to demonstrate to the other person (or the audience) that your idea is true.
6 minutes ago, Eiuol said:
Also because having a debate/argument implies wanting to demonstrate to the other person (or the audience) that your idea is true.
No. I was providing facts that most of the ideas on this post are demonstrably false.
5 minutes ago, New Buddha said:
No. I was providing facts that most of the ideas on this post are demonstrably false.
Okay, but if he does seek protectionism, then this idea - the main idea - is true: “destabilizing the Mexican economy is his end game”.
9 hours ago, Nicky said:
- American companies having access to cheap labor isn’t a bad thing. It’s a good thing, because it lowers prices for American consumers.
Prices are set by supply and demand to wring the best price for the seller that the market will bear. Lower manufacturing costs increase the profits of the manufacturer, and do not lower prices for the end purchaser.