Comment Re:Why does there have to be a next? (Score 2) 30
Something with: any one who believes in infinite growth in a finite world is a madman
Something with: any one who believes in infinite growth in a finite world is a madman
I live in Canada. Every time you hear news about the dollar, it's bad news, whether it goes up or down. If it goes up the news reporters go and interview exporters who complain that this hurts their business, and when it goes down the reporters interview importers who explain how this is going to make all the products we buy more expensive. It's honestly very tiring. I mostly just ignore stories like this.
If a currency is functioning normally (not being manipulated) then it works to automatically balance trade. If Americans start buying more and more from overseas, then supply and demand in the currency market will cause the dollar's value to go down, which makes American products and investments more attractive to everyone else. You just have to understand that the US buys a lot of cheap products from overseas, but mostly exports expensive high end products like aircraft parts and machinery. People around the world really like investing in US companies (and even T-bills) because the US market is large, profitable, and safe. Therefore the long term trend has been that Americans import a lot of cheap products in exchange for a lot of investment capital flowing into the US. This kept industry humming, but also had the effect of pushing up housing prices, as a lot of people invest in US real estate.
The dollar has traditionally been so high because the US was considered to be such a safe place to invest. Investors around the world wanted better returns, and foreign governments wanted a safe reserve currency, and for the most part the US government took advantage of this because it gave the US access to very cheap capital (borrowing) which allowed deficit spending, and it also gave the US enormous leverage over pretty much every other country in the world financially. For instance, the sanctions against Iran, North Korea, and Russia are based on the fact that the global system of trade is mostly based on the US dollar.
The US dollar is falling because even though Americans are still buying lots of stuff from overseas, there's a notable concern about the stability of the US as both a safe place to invest, and as a good investment return. Now I personally think there's still a potential for high return on investment if I were to invest in the US, but I do also have concerns about any money I have in US investments because you just don't know if the US government would do something drastic like confiscate foreign investment, etc. I don't consider it likely, but it's not something I would have worried about 10 years ago, but it's at least a remote possibility now.
I think the goal of the US is to bring more manufacturing back onshore. I think this is a reasonable goal. There are always winners and losers in any change. Bringing back manufacturing jobs tends to help the working class, as does limiting the supply of cheap labor by deporting lots of people. Note that while this is probably a net benefit to the working class, corporations won't like it. They prefer a strong US dollar which makes borrowing cheap and they prefer low wages too, so they're generally pro-immigration. But that's the story of the last few years... the working class has now gained political influence, not just in the US but across the western world, and the right-wing political parties have embraced them, which is a bit surprising because the right-wing parties have traditionally been the party of big business.
Big business now finds itself politically homeless, or certainly far less influential than they used to be. I suspect they're just hoping to ride this out. I'm not convinced this is a temporary situation. I believe that Trump has proven that the working class is now in play politically, and both parties will bend themselves towards catering to their interests. We even saw this in Canada with the liberal party running a guy who's very moderate, perhaps even right-of-center in some ways, and reduced immigration significantly even before the election earlier this year. I think this is just the new political reality. That doesn't mean the democrats won't win again, but they certainly won't win if they don't start adopting some of the populist rhetoric ("working class vs. the elites") that has worked so well for Trump. People clearly wanted Sanders to win the democratic primary, but the democratic party has super-delegates and wouldn't let Bernie win because the party itself (the people running it) are very much against populism. The republican party doesn't have super-delegates, which is why a populist like Trump was able to win the primary in that party.
So it's interesting to see this story trying to paint a low US dollar as a bad thing. It's bad for big business, but not for the working class. I find it surprising because I wouldn't normally think of msmash as a pro-big-business editor. But here we are.
When reading statements or listening to interviews, always keep the speaker's motivations in mind. What would the CEO of Ford be trying to accomplish by what they're saying? The typical motivations are to reassure investors. How does saying that half the white collar jobs are going to be gone in the coming years reassure investors? It says, "this new technology is going to allow Ford to cut half of a very large expense."
Is it realistic? No. But it supports his goal: you should invest in Ford because we can already see how to use this new technology to drastically decrease costs.
Another goal he has is to keep workers fearing for their jobs. This is an implied threat to a bunch of Ford workers... you're lucky to have a job, so keep your head down and don't make a fuss. Cuts are coming.
Diminished maybe, but not all that much.
I think we can reasonably assume that if there's a huge blackout, it won't last forever. A lot of smart people will work hard on getting things up and running again. A few years ago in the USA it lasted for a bit longer, what was it, a week or two? Recently in Spain it lasted a few days. But all those power stations and power grid operators don't just shrug and go home. So getting through those days is probably all it takes for any reasonably realistic scenario.
And you can build things up piecewise. I've got my solar now. The next thing will be a battery. Once I have that, I can think about an electric car.
China is certainly investing in renewables big time, but mostly that's out of desperation so that they can reduce their dependence on imported oil from the middle east, which they know they can't provide effective security for.
There are a lot of headwinds for China. For starters they have poor geography. Their demographics are very bad. International investment is drying up. If anything they're over-investing in solar, with huge plants being built up in the northwest areas where they don't have industry, nor the infrastructure to get the power to where they do have industry. I'm not saying they're going to disappear, but the overall trend for China is downward. Don't buy into the hype machine.
Why did the Roman Empire collapse? What is the Latin for office automation?