What Happened to Argentina? Can something like that happen to China?

What Happened to Argentina? Can something like that happen to China?

Joined: May 28th, 2004, 9:16 pm

March 29th, 2005, 9:08 am #1

I watched a documentary on how 40 billion dollars were taken in the middle of the night out of the country by multinational banks. Bank accounts of the people were frozen by the government and half the country became unemployed.
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Joined: May 28th, 2004, 9:16 pm

March 30th, 2005, 12:24 am #2

"In two years, the holdings of Argentina's Central Bank dropped from $30 billion to $5 billion, prompting the government to freeze the accounts of Argentine civilians, thus liquidating their life savings. Argentina's unemployed now include lawyers, teachers and doctors.

There has been an increase in fees for Argentine public services, cuts in social programs and reforms that are favorable to foreign
banks. Argentina last month defaulted on its payments to the World Bank.

The World Bank and IMF is implementing similar economic programs in other countries. In Argentina's case, it is particularly
pronounced. The policies are linked to poverty and hunger.

Foreign banks played a major role in the Argentine financial crisis,
they made enormous amounts of money on extremely high interest rates that were charged through most of the last few years. Their lending does not contribute to productive investment or to any economic growth. The country has been in a recession for more than four years. The U.S. government, which runs the IMF, destroyed the Argentine economy. It was once one of the
richest countries in South America. Now more than half the people are living below the poverty line. "
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Joined: February 3rd, 2003, 10:02 pm

March 30th, 2005, 6:06 am #3

The same thing is happening everywhere where exports accounts for a large part of the national economy. From the Philippines to Mexico to Brazil to every country that emphasizes exports, especially subsidized exports through excessively low exchange rate, the national economy inevitably declined as foreign traders get richer and richer.

The only way to enrich the people is the expansion of the internal economy. This should be obvious to anybody. Unfortunately, people have grown up thinking exports is the only way to enrich a country that they irrationally support more exports even at excessively low exchange rate which makes their exports a free gift to the importing countries.

FDI also is just a way for rich countries to buy up backward countries cheaply, especially when the currencies of the backward countries are excessively low. I keep telling the Chinese people the only way to make China strong and rich is to develop China's own domestic economy which has nothing to do with foreign trade. China should do only enough exports to earn enough foreign exchange to buy high tech products that it critically needs and nothing more. China should strive to make yuan a hard international currency. In the end, the only way to make China rich and powerful is to follow my 12-guidelines.

http://www.network54.com/Forum/thread?f ... 1105667957

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12 guidelines for the rapid development of China’s economy:

1. China’s store of wealth should be in terms of the knowledge base of its people and in the productive facilities and infrastructures that are owned by the Chinese people;

2. Because of the first statement, China should implement specific programs to rapidly increase the education of its people especially in higher science and engineering education; special programs should be implemented to educate some 1 million science and engineering doctorates within 10 years and ultimately educate some 5 million science and engineering doctorates within 30 years. These special education programs should provide full scholarship to any qualifying student, especially those in the rural areas, who do not have the financial means to participate in the special advanced educational program;

3. Also because of the first statement, China should implement wide-ranging science and engineering R&D to advance China’s high tech knowledge so that it may quickly equal and ultimately surpass any foreign countries in terms of high tech products thus minimizing the need for China to import high tech products while at the same time enable Chinese companies to export high tech products of China’s own. Since the high tech products will be made with highly skilled and highly paid scientists and engineers and technicians, it will minimize the need to subsidize exports thus making foreign trade beneficial to China as a whole;

4. To raise the overall economic level of China, the rural farmers must be relocated to the urban areas where they can be put to work more productively in manufacturing and service sectors;

5. Urbanization of the farmers should be understood to be not the building of luxury office towers, luxury hotels, or luxury housings that only “rich” foreign investors with their over valued dollars or heavily subsidized “rich” Chinese exporters can afford. Urbanization should be understood to be putting the farmers to work in the urban settings to build their own housings, manufacture their own consumer goods, and provide their own services. Only when urbanization can be done in a bootstrapping operation will it be self-sustaining and long lasting, unaffected by external forces or conditions such as recession or inflation or political turmoil in foreign countries;

6. With the understanding from the above, it is clear that China’s creation of wealth does not depend on foreign factors. Therefore, China should concentrate on the internal development and minimize the insidious “subsidized” export which is emasculating the Chinese economic development;

7. Specifically China should withdraw immediately from the evil WTO which is nothing more than a dog collar around China’s economic neck and provides the control by means of which the foreigners are taking over China’s economy and turning it into an economic colony. If China lost control of its economy, it will quickly lose control of its political sovereignty and military security as well;

8. Following the withdrawal from the evil WTO, China should ban all foreign direct investments (FDI) and allow foreign access to China’s market through joint ventures (JV) only which are predicated on real transfer of technologies and limited to 10% for the foreign partners. China should make a distinction between FDI which is foreign direct investment made by non-ethnic Chinese of foreign citizenship and OCI which is overseas Chinese investments made by ethnic-Chinese of foreign citizenship. Ethnic Chinese of foreign citizenship are no different from Chinese citizens who have never left China. They will not transfer their capital and accumulated profits overseas but will leave them inside China on a long term basis. Because of this there is no difference between OCI and domestic investments and should be encouraged by the Chinese government;

9. China should trade by negotiating bilateral trade treaties and bilateral investment treaties that will allow China to implement an enlightened protective trade policies that would protect the fledgling high tech and farming industries while they consolidate and open those sectors that are already competitive to foreign competition on genuinely equal competitive rules;

10. China must immediately raise the value of the RMB by some 10% to 20% at a fixed peg, and continue to raise the value of the RMB steadily to full PPP value, while maintaining a fixed peg after each increase, within 7 to 10 years at which time it could allow a wider trading range of some 10%; ultimately when the Chinese economy has reached full development the peg can be removed totally as the Chinese yuan will be the strongest currency in the world backed by an economy that is as big as all the rest of the world’s economy combined;

11. China must immediately implement a fuel cell/hydrogen transportation system to be totally free of oil imports within 10 years. China must also implement a program to build some 1,000 nuclear power plants within 30 years to make China completely energy self-sufficient;

12. While the Chinese government must direct the overall development such as urbanization, education and science and technological R&D, etc., yet it must encourage the development of private enterprises so that eventually all the enterprises in China will be owned by the Chinese people. Only a privately owned economy will be motivated and dynamic to provide the most advanced goods and services.

With the implementation of the above policies, China’s economy will grow rapidly with rapid increases in the knowledge base of the Chinese people and the rapid increases in the productivity of the Chinese workers which will increase their incomes thus enabling them to afford the highest standard of living in the world. And with the largest economy with the most advanced technologies, China will be able to deploy the most powerful military to guarantee that the humiliation of the 19th and 20th centuries at the hands of the barbaric foreign aggressors will never be repeated again. With the traditional benevolence of the Chinese civilization, China will be able to lead the entire world to an unprecedented era of global peace and prosperity the like of which has never been seen before.







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This article may be re-posted provided attribution of source is given.




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Joined: May 28th, 2004, 9:16 pm

March 30th, 2005, 11:50 am #4

Every developing country needs to export in order to grow. Argentina is a net energy exporter, and the health care is actually quite good. The public health care system is quite strong and the higher education system is free (i.e. you don't have to pay to get a university degree).
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Joined: February 3rd, 2003, 10:02 pm

March 30th, 2005, 6:46 pm #5

"Every developing country needs to export in order to grow."

This is not true. Every country that needs to import goods that it cannot produce needs to export in order to pay for the needed imports. This is a big difference from saying that a country needs to export in order to grow. Unfortunately most people cannot understand the difference. If China can produce everything it needs, then it does not need to import anything in order to grow, while a small country like Brunei needs to import just about everything in order to have anything from toothpaste to jumbo jets.

In the case of China, it is very fortunate in having most of everything it needs and could best employ its energy and resources to build up the internal economy. Especially for China subsidized trade is denying resources to the development of the internal trade and is responsible for the very slow internal grow of China. While people are dazzled by signs of rapid growth such as the increase in the purcahse of cars, yet this is only a very small amount compared to China's vast population. In the end, China could and should develop its own internal economy in order to give the Chinese people the fastest rate of rise in standard of living.




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Last edited by Liang1ahost on March 30th, 2005, 6:41 pm, edited 1 time in total.
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Joined: May 28th, 2004, 9:16 pm

March 30th, 2005, 9:49 pm #6

In order for a internal economy, people need money to buy things in the first place. Where are they going to get that money from? When they get jobs, they will produce but who will they sell these goods to when people can't afford them?

You talk about Burnei but they export billions of dollars worth of oil each year in order to get the money to buy things.
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Joined: February 3rd, 2003, 10:02 pm

March 31st, 2005, 5:29 am #7

"In order for a internal economy, people need money to buy things in the first place."

Money is in exchange for goods and services produced. Where is it said that money can be eraned only by exporting goods? It is a failure of the Chinese policy that the Chinese people can only work for the lowest wages to produce goods for exports. If the Chinese government followed my 12-guidelines then hundreds of millions of jobs will be created while expanding the Chinese interal economy. While the export jobs must be of the lowest wages to compete against other low wage exporting countries, jobs for internal economy can be raised to the highest level commensurate with the productivity.

It is the stupidest thing to ask where people's money is coming from. The money is nothing more than a medium in exchange for output. The more important question is to ask where the jobs are coming from and what kind of jobs? If the Chinese government start expanding the Chinese economy by putting unemployed or underemployed farmers to more productive work in the urban areas, then immediately there will be tens of millions of new jobs every year with increasing productivity for the building of housings, building of schools and hospitals, building of infrastructures, productivion of goods and services of all kinds, etc. And the increase in demand will in turn create more demand which leads to more jobs. So this answers the question of where the jobs are coming from and what kind of jobs they will be. Therefore, the development of the internal economy is in itself the creator of jobs. And more money will come with more jobs of higher productivity.

"Where are they going to get that money from? When they get jobs, they will produce but who will they sell these goods to when people can't afford them?"

They will sell what they produce to each other. Furthermore, their productivity will increase so that they produce more for each other. The bakers will produce more bread. The textile workers will produce more shirts and pants. All kinds of consumer goods will be produced for more people. Their increased output will give them more incomes. And the increased incomes means more purchasing power. This means more people who are able to afford more goods of higher prices.

You are asking which comes first? The chicken or the egg? The answer is that they come at the same time. The Chinese government must at the same time increase output and consumption. And the urbanization of the farmers will provide both at the same time - both supply and demand.

Of course, the initial investment must come from the Chinese government. But once started the development will be a self-sustaining growth. This is why the urbanization of the farmers is so important.

"You talk about Burnei but they export billions of dollars worth of oil each year in order to get the money to buy things."

Brunei is just an example to show that small countries must import everything. The fact that it has a lot of oil is beside the point. I could also mention Laos or Nepal which have much less. Since they are small and don't have much technologies at all, they must either export whatever they can or live a very low tech life.

China on the other hand could and should advance its own highest level technologies and shouldn't need to import much high tech products. In which case it would not need to export much of anything to pay for the reduced imports and could still give the Chinese people the highest standard of living based on the most advanced technologies in the world. The fact that China is fixated on foreign trade and not on the advancement of technologies and the expansion of the internal economy is a very bad mistake.


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Joined: May 28th, 2004, 9:16 pm

April 1st, 2005, 12:11 am #8

"It is the stupidest thing to ask where people's money is coming from. The money is nothing more than a medium in exchange for output."

I understand that money is nothing but printed paper but the value of the Yuan can become worthless. I don't think the government can just create tons of jobs and print more money to pay them.

China still needs to import tons of raw materials like steel, oil, cement, wood and even food.

The Rothschilds AKA IMF AKA World Bank pretty much control the worlds currency. They are all the same people and they will never allow such a thing.

How International Bankers Gained Control of America

Rothschild family
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Joined: February 3rd, 2003, 10:02 pm

April 3rd, 2005, 1:39 am #9

"I understand that money is nothing but printed paper but the value of the Yuan can become worthless. I don't think the government can just create tons of jobs and print more money to pay them."

Actually any government can print any amount of money and create any number of jobs. The problem is keeping the demand and supply balanced. That is there must be an increase in supply as the amount of money increased. As long as the demand and supply are balanced there will be a rapid growth resulting in an expansion of the economy and the rise of standard of living.

The danger is if the supply cannot increase with the rise in money then you will have a situation of more money chasing fewer godds which leads to inflation which in severe cases will end in the collapse of the currency. But China's problem is not too much demand. In fact China's problem is too little demand from a "poor" Chinese consumer group. So if the amount of money increased it will increase the demand to buy up all the goods that are currently exported.

Furthermore, if the money injected into the economy is used to employ workers to produce things that are needed such as more electricity, more water, more schools and hospitals, more consumer goods of all kinds, and infrastructures, etc., then there will be a healthy growth of demand and supply leading to a rapid and balanced growth of the Chinese economy.

"China still needs to import tons of raw materials like steel, oil, cement, wood and even food."

Obviously China still needs to import many things such as jumbo jets, parts and components for all kinds of consumer electronics, technologies for cars, etc. However, China is importing only specialty steel which forms only a small fraction of the steel needed by China. As China's technologies advanced it should be able to produce all kinds of specialty steel and should not need to import any kind of steel at all. I doubt very much if any kind of cement is currently imported. Please correct me if I were wrong on this.

Lumber is obviously very scarce now in China and will probably grow scarcer as demand increased. China should expand its aforestation efforts to increase the supply of lumber in the years to come. Aforestation will also help suppress desertification and conserve soil and water. Unfortunately, it may be necessary to import lumber. But with more advanced technologies, many uses for lumber can be replaced by other kinds of materials such as stone, plastics, pressed boards, glass fibers, etc. So again it is of critical importance for China to advance its technologies.

China will not be able to produce tropical fruits such as cocoa or oil palms and must import them. This is unavoidable.

As to oil, I've always said China must immediately expand its R&D on fuel cell and build 1,000 nuclear power plants in the next 30 years to provide the needed electricity to electrolyze water to make hydrogen to power the fuel cell cars. Once China succeeds to change over to fuel cell cars, then oil need not be imported or need be imported only in small quantities. Here too we see again the importance of advancing China's technologies.

It is for these reasons why I put the advancement of China's technologies as the first priority in my 12-guidelines.

"The Rothschilds AKA IMF AKA World Bank pretty much control the worlds currency. They are all the same people and they will never allow such a thing."

As long as China played by their rules such as the evil WTO, then it will become more and more dominated by them as time goes on. On the other hand, if China concentrated on expanding its domestic economy and advancing its high technologies, then it could turn around and control the world economy. And with its dominance of the world economy it could brush aside these IMF, World Bank, Rothschields, etc. In fact China could dominate them when they have to play by China's rules. This is why I kept saying China should get out of the evil WTO and form bilateral trading treaties such as the ones with the SE Asian countries or the Shanghai Cooperative Group with the Central Asian countries and Russia.

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I'd like to say something more about answering the statement that China's people are too poor to afford its own products which makes it necessary for China to export them.

As I've explained in the previous post, the main reason why China's people are poor is because they are not productive. It is obvious that the American workers are more productive than the Chinese workers by many times. This is the main reason why the Americans are making higher incomes.

But there is also another important reason why the Chinese people cannot afford their own products. The reason is the excessive devaluation of the yuan. Let me give you an example to illustrate this.

Suppose a DVD player costs 830 yuans in China and $100 in America. Since a Chinese farmer makes only some 3,000 yuans a year, he is too poor to afford a 830 yuan DVD player. On the other hand an American makes some $30,000 in annual income and can easily afford $100 for a DVD player. So people say the Chinese are too poor and the Americans are rich.

But now let's say the Chinese government raised the value of the yuan to its full PPP value of 1.6 yuans to the dollar. Now either of two things must happen. First the yuan cost stays at 830 yuans and the dollar cost is raised to $500. Immediately, American consumers will be much less able to afford the $500 DVD player. So the American consumers have suddenly become poorer. The second thing that could happen is that the dollar cost stays at $100 and the yuan cost is lowered to 160 yuans. Immediately many more Chinese can afford to buy the DVD players. So the Chinese have suddenly become much richer. So it is obvious from this example the so-called poverty of the Chinese people is actually forced on them by the CCP policy of excessively devaluing the Chinese yuan. And while it is true the Chinese people are poorer in the absolute sense due to their lesses productivity, yet the Chinese people's poverty is very much aggravated by the CCP policy of excessively lowering the value of the yuan. This is why I kept saying that subsidized exports is impoverishing the Chinese people and is responsible for China's inability to expand its internal economy. This is also the point of my post titled "Subsidized exporters are parasites" which explains why subsidized exporters are parasites sucking away the goods and services produced by the rest of the Chinese economy while returning little or nothing to them. You can see the post at the following link:

http://www.network54.com/Forum/thread?f ... 1105667800

In the end people must realize that trying to use subsidized exports to expand China's economy is like drinking poison to slake the thirst. It will not enrich the Chinese people as a whole but only enriches a small group of exporters. And as pointed out in "Subsidized exporters are parasites" it is impossible for all the Chinese workers to work in the subsidized exports because then there will be nobody left to subsidize them. It is like for a man to try to eat himself. It is impossible.

I hope I have made it clear that the current stumbling block to China's economic expansion are the wrong policies implemented by the CCP. They are wrong to rely on subsidized exports as the main engine of China's economic growth which have reached a point where it is suppressing China's internal growth. The only sustainable way for China to expand and grow is by the advancement of its technologies and by expanding the Chinese internal economy through the urbanization of the farmers. Money is meaningless at the national level. It is as stupid for China to be too cautious about injecting money to stimulate the internal economy as it was stupid for the American Fed to withhold liquidity from the banks suffering runs prior to the depression which made the Great American Depression inevitable.



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Joined: May 28th, 2004, 9:16 pm

April 3rd, 2005, 2:31 pm #10

"But now let's say the Chinese government raised the value of the yuan to its full PPP value of 1.6 yuans to the dollar. Now either of two things must happen. First the yuan cost stays at 830 yuans and the dollar cost is raised to $500. Immediately, American consumers will be much less able to afford the $500 DVD player. So the American consumers have suddenly become poorer. The second thing that could happen is that the dollar cost stays at $100 and the yuan cost is lowered to 160 yuans. Immediately many more Chinese can afford to buy the DVD players. So the Chinese have suddenly become much richer."

That is exactly what Argentina did and it ended up to be a very bad idea. Argentina pegged the Peso to the USD 1:1 and it worked well for a short amount of time but investors started shutting down the factorys and setup factorys in places like China cause they can find much cheaper labour.

Right now a majority of the factorys in China are owned by foreign investors. If they see that profits are no longer as good, they can easily move everything to India or anywhere with lot's of cheap labour. There will be thousands of empty factorys and jobless people just like Argentina.

I understand that you want to move away from depending on exports as the main source of income for China but it's still too early. It took America 200 years before it got to the super power that it is now. Maybe China can do it 50-100 years from now.
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