[Grovenet] Gas Lines are not fun

[Ron D'Eau Claire]

David wrote:

The difference between the US and the struggling countries is that we  
have the infrastructure in place to process our own resources and  
meet our own needs.  Not our "wants" perhaps, but our needs.

------------------------------------------

Do we have the infrastructure to meet our own needs, even our most basic
needs, David? 

If so, where is it? 

I'm not just talking about just importing toys and luxuries like big screen
TV sets, although such things are often what spur people on to doing more
with their lives.  

As the risk of sounding like Andy Rooney:

Why is it that when I buy any electronic component, whether it goes in a TV
or into a life-saving medical instrument, it comes from a foreign country? 

Why is it when I go to the hardware store to fix up my home I find almost
everything I need has been imported because there are so few factories
making things here, and if I visit those few remaining factories here, I'll
find them using foreign-made equipment and supplies?

Why does the giant earth-moving machines clearing lots for a new housing
sub-division down the street say "Hyundai" on them. 

Why do the fork lifts in our warehouses shuffling foreign goods to American
stores say "Yamaha" on them?  

Where is an adequate US fuel supply for anything but a short term
"emergency"? 

Even if we have the fuel, how do we maintain our transportation
infrastructure without parts and vehicles from other countries? 

How do we eat without the foreign oil to grow, harvest and transport our
crops? 

Why are foreigners, desperate to find something spend their American dollars
we've sent them for their goods and services, buying American real estate?
(1)

We may have an acceptable "balance of trade", at least for the moment, but
it's a balance maintained by selling our assets -- non-renewable assets such
as the very land under our feet. 

It seems to me the selling of such assets has always been a sure sign of a
struggling, marginal society living on the verge of collapse. 

After all, how much real estate do we have? How many folks would like to
rent their homes from some company in China or Saudi Arabia?


Ron D'Eau Claire 


(1) http://nreionline.com/mag/real_estate_foreign_investment_us/




-----Original Message-----
From: grovenet-bounces at rdrop.com [mailto:grovenet-bounces at rdrop.com] On
Behalf Of David Morelli
Sent: Thursday, January 31, 2008 12:07 AM
To: Forest Grove local interests list
Subject: Re: [Grovenet] Gas Lines are not fun



On Jan 30, 2008, at 8:55 AM, Ron D'Eau Claire wrote:
>
> Just what do we make to sell others? We don't make much of anything 
> any longer, certainly nothing that others aren't making too, and
> usually at a price and standard of quality we can't even begin to  
> compete with. That's why our stores are stuffed with foreign goods.

Look to the basic economics.

Trade is based upon exchange of goods.  If we had straight barter it  
would be more obvious that China will only sell us goods if they get  
goods in exchange.  If we don't have anything to sell, then we don't  
get anything from them.  In the case of barter, if trade exists, then  
trade is always balanced.  Period.

Instead of barter we have a currency based trading system.  If there  
is a free market in currency exchange with a floating exchange rate,  
then the rate will rise or fall to compensate for any imbalance in  
trade so that the trade will always balance.

Instead of a floating exchange rate we have a fixed exchange rate  
that is biased to favor Chinese exports.  We buy their goods with our  
dollars, and because they don't want to purchase our goods with our  
dollars, they loan the dollars back to us, so that we can buy more  
stuff from them.  They also use our dollars to buy oil to fuel their  
economy, then OPEC loans the dollars back to us, so we can buy more  
oil from them.  If the dollar declines to the yuan then the trade  
should come into closer balance.  If we have nothing to sell, then  
there will be no trade and we will have to live on what we can produce.

>
> What cheap currency does to the USA is the same thing it does to all 
> struggling countries. It encourages us to sell our assets to
> other nations: our trees, our coal, our ores, our crops - anything  
> that can bring in some dollars to offset part of the huge debt  
> we're running up buying everything from refrigerators to TV's to  
> cars to pencils. Eventually we go broke as we run out of things to  
> sell except food crops, and so our prices for food at home  
> skyrockets right alongside unemployment and poverty since we need  
> to sell most of what we grow to others to stay solvent.
>
> Ron D'Eau Claire

The difference between the US and the struggling countries is that we  
have the infrastructure in place to process our own resources and  
meet our own needs.  Not our "wants" perhaps, but our needs.

The strong dollar caused America to buy foreign goods and oil and go  
into debt.  Since we are not selling goods in exchange, what will pay  
that debt?  If they don't want our goods, perhaps they want our  
assets?  We got into that condition with a strong currency.

With a weaker currency, we may still want to buy those foreign TV's,  
cars and pencils, but the price will be higher.   American goods look  
better.  If they are not already made here, people might even return  
to production.  Or they may produce goods to offer in exchange.

David
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