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China's Bubble
Chinese Junk Heads Overseas
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  • Andrew Allison

    Anybody foolish enough to buy Chinese bonds deserves what they’re (not) going to get.

    • Jacksonian_Libertarian

      I was going to say the same thing.

  • Nevis07

    I’m going to go a bit off topic here, but this to me, is yet another signal of precisely why we don’t need more free trade agreements…. There is excess capacity already producing more crap that people here in the US (the West in general) don’t need. If the price of t-shirts goes from $10 to $8 apiece, the American family is not really any better off.

    It’s excess capacity based on already over-indebted typical American families – and therefore excess demand built upon excess supply. China is the main culprit of this because of 1) the commodity supercycle and 2) government sponsored enterprises. But adding even more supply by way of FTA is only going to exacerbate the problem and the US is already running a $500 billion dollar annual trade deficit with the rest of the world. That’s half a trillion dollars of wealth we’re sending to our trading partners every year (and it’s growing).

    I believe in free trade as a concept. Really. I have an undergrad degree in econ, but the problem with all trade theory is that it makes basic assumptions that are not present in the world that we live in. States cheat by various methods, they have vastly different environmental laws, labor laws, and tax codes that make it incredibly difficult for trade to balance between two partners for an extremely overbearing amount of time – if ever.

    Those who’ve seen my comments before will know that I’m far from a Trump fan, but he is correct when he points out that when we’re paying for an excessive amount of global commons security, while our allies freeload off of us, and yet at the same time we’re sending a net of $500 billion overseas to our allies and adversaries while they take advantage of the system at our expense (we even ran a $155 billion dollar deficit with our EU ‘friends’ last year, who have relatively similar incomes, laws and regulations). It’s completely unsustainable in the long run and if anything enriches our enemies in the short and medium term. In the long term it just kills the American citizen. Obama is insane to push for even more free trade agreements. In this regard, Trump is correct in his position, even if he doesn’t completely understand why.

    • Ofer Imanuel

      How is the free trade related to paying for global security (except that both are Trump topics)?

      • Nevis07

        hmm. Like I said, I’m going off topic – but if you can’t follow the empirical news then that’s on you, not me. Andy BTW, how is free trade NOT related to global security???

        You seem to be a Kremlin paid troll, but that’s just my guess…

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