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Reinstate tariffs instead raising taxes.

Guest Spirit Talker

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This must be Serendipitous Day. I had a hour long discussion with a Gentlemen in Arizona that has a very similar position.


I think the United States still has enough leverage to get economic concessions from China.


I see that they are bailing out the Greeks and helping them build a shipping industry.


Corporations are holding onto their investment capital until after the elections.


But, industry is ramping up. I can feel it begin to humm.

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Guest American4Progress

Learn the ways of the foreign lobbyist.


Under the Federal Election Campaign Act (FECA), it is illegal for "foreign nationals" to "directly or indirectly" contribute, donate, or spend funds in connection with any federal, state, or local election in the U.S. It is also illegal to "solicit, receive or accept contributions or donations from them." The U.S. Chamber of Commerce is a trade association that qualifies as a 501( c )(6) organization which can engage in limited political activity, lobbying, and accept dues from foreign members. While regular dues from American companies like Aetna or News Corp. can be used for any purpose deemed necessary by the Chamber leadership, 501( c )(6) organizations, like any organization, cannot use foreign funds to advocate for a political candidate or cause.


The Chamber has spearheaded efforts "to raise money from foreign corporations, including ones controlled by foreign governments" and funneled that money into its general 501( c )(6) account. Foreign members send money either directly to the U.S. Chamber or to their country's local American Chamber (AmCham), which then transfers dues payments back to the Chamber's H Street office in Washington, D.C. While the Chamber may claim to have internal controls, foreign funds are fungible and all dues go to the same general account, which is then used to fund the Chamber's political attack campaign. Essentially, as Shakir pointed out , "they're acting as a [Political Action Committee]" which "run ads against political candidates. But the difference here is PACs disclose where they get the money from." The Chamber refuses to disclose its donors.

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According to the IRS Publication 557, in the Organization Reference Chart


501 ( C )(6) — Business Leagues, Chambers of Commerce, Real Estate Boards, etc.


Contributions to labor, agricultural, and horticultural organizations are not deductible charitable contributions on the donor's federal income tax return. However, such payments may be deductible as businesses if they are ordinary and necessary in the conduct of the taxpayer's trade or business.


See Deduction not allowed for dues used for political or legislative activities under 501 ( C )(6) - Business Leagues, etc.


Chamber of Commerce - A chamber of commerce usually is composed of the merchants and traders of a city.



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Lowering the value of our United States currency is a No, No. It will make our exports cheaper, but also make our nation poorer.


Foreign nations are on the road to zero value for their currency.

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Guest Charles P.

Tariffs are a good solution. We can't live in fear of what other countries may think. Our families have to eat and pay bills.


We cannot live in fear of inflation either. The commodity market needs to be tighter regulated.

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Guest M. Hughes

The truth that economists have been afraid to broach in public is that we have set a trap for this economy as well as for those economies dependent upon our trade that will be hard to escape from. since 1990 the United States has paid out to the world over $ 5 trillion dollars as a result of our international trade imbalance. We have run deficits with almost all countries rich and poor alike, high wage and low wage. Send legislation on trade to the Congress making imposition of non-discriminatory tariffs automatic whenever the deficit on the traded goods account exceeds 2% of GDP in traded products. The President has much of the authority already under numerous safeguard provisions of existing trade law. Even if it were not to immediately go into effect, politically it would put the President on a firm footing with respect to defending American jobs.

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Something has to be done quick. The global dollar-based monetary system is breaking down, right before our eyes. Because now not only is Fed Chairman Ben Bernanke hell-bent on devaluing the U.S. dollar, but Japan is also going to start devaluing its currency, the yen.


Meanwhile, Europe's euro is also deathly ill.


Is it any wonder gold is soaring?

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A New Globalization for a New World

Dominique Strauss-Kahn

Managing Director of the International Monetary Fund

Opening Address to the 2010 Annual Meetings of the Boards of Governors of the World Bank Group and the IMF

Washington, DC, October 8, 2010


I hear ideas floating around about a currency war. Even if “currency war” is probably too strong a phrase, it’s true that there is this idea that currencies could be used again as a weapon. History has shown that this is not a solution, and that it can even lead to a very bad situation. There is no domestic solution to a global problem.


It is understandable that some individual countries facing huge capital inflows want to resist this kind of volatility, this source of instability and possible bubbles. So I am not blaming countries which try with one shot to limit the influence of capital inflows. But it cannot be a long-lasting solution. What we need is more cooperation on the monetary side and in the international monetary system.


During the last two years, we at the IMF have tried to change the international monetary system, and not only at the margin—I think it is more important than that—by creating the so-called flexible credit line and recently, the precautionary credit line, to try to help countries to avoid building up reserves and, by this process, creating more imbalances.


We are now proposing a new kind of analysis, spillover reports, which will analyze better the consequences of a policy taken in one country on the rest of the world. This is a way to show the linkages between the different economies, which are now much bigger than they were before.


We are also trying through the analysis we are preparing for the G-20’s Mutual Assessment Program, to show that working together is a win-win process. We are showing that with the correct policies, everybody can be better off. 2.5 percent more global growth over five years can be won. Thirty million jobs can be saved or created. More than 30 million people can be lifted out of poverty.


All this comes from this win-win process of working together. And I insist on this because I am afraid that with better growth at the global level, the idea that there is an absolute need in a globalized world to work together may lose some steam. That is why we need more initiatives on systemic stability.


So we certainly need to go for sustainable growth, to go for jobs, to go for change in the financial sector, but we need to go for cooperation, too.


Is it enough? It's probably a good part of what we need to do to exit the crisis. But when we are out of the woods—will it be enough? Probably not. We're facing bigger changes than that, and the growth model after this crisis will not be the same as the one before it. Everybody knows this.


What are the changes? We are beginning to see them. The Industrial Revolution, which started two centuries ago, is coming to an end. It created something that had never happened before in the history of mankind. Some countries, not that big, with proprietary technology that they were able to keep for themselves, have had the power to dominate the world—even if the countries were not that big. European countries, then the U.S., were—and are still—in this situation.


This had never happened in the preceding centuries. Before, the strength of a nation was measured by the population--primarily because technology was almost the same for everybody. This hasn't been the case for the last two centuries. But we're now coming back to a situation where technology is available for almost everybody.


This is not going to change overnight; it’s going to take a decade or two. But after these two decades, we will come back—after this very special period in history—to what has been the rule: that a large country is very likely to be stronger than a small country.


This has many consequences for our growth model. It means that we need to think about new sources of growth, including green growth. It means that we have to think more about rebalancing the structure of growth between the private part of growth and the public part of growth. It means that we need also to work on rebalancing, between surplus countries and deficit countries. And it means that we need enhanced cooperation and governance. This is the last point on which I want to elaborate a little.


As you know, we're in the process at the IMF of reviewing our governance. It's necessary. If multilateral institutions are to help—and they need to—then they need to be legitimate. To be legitimate, they need to reflect these changes that I just mentioned, which mean that the balance of power in the future is going to be slightly different from the balance of power that we experience today.


But we're changing our balance of power, as reflected by changes in quotas and chairs in the IMF. With this goes a change in responsibility. If you have a bigger stake, a bigger say, a bigger responsibility, then at the same time you have to make choices that take into account not only your own economy, but the whole economy. The more you are at the center, the more you are responsible for the whole. And so countries which until now were at the border of the international system, wanting to come to the center of the international system, wanting this to be reflected in the quotas, in the chairs in an institution like the IMF—they too must take more responsibility in the stability of the global economy.


We're working on that. We're not totally there. It's no secret that discussions are tough among the membership. I think that we have a good chance to see the quota review completed and the chairs question solved in the coming weeks. And if this is done—and it has to be done—then we really will have at the beginning of next year a totally legitimate institution. Most of you were kind enough to recognize that during this crisis the IMF has proved its relevance. It needs now to prove its legitimacy. When this is done, I think you will really have a new institution, which can help build a new globalization for a new world.


That's what we have to do. And to accomplish this, you need to work together:


If you want to restore confidence in an uncertain world, you need to work together.


If you want to put people back to work, you need to work together.


If you want to build a better and safer world for our children and grandchildren, you need to work together.


And these Annual Meetings are certainly the place to do so.


Thank you.

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We are showing that with the correct policies, everybody can be better off. 2.5 percent more global growth over five years can be won. Thirty million jobs can be saved or created. More than 30 million people can be lifted out of poverty.


How can we worry about the rest of the world when fourteen million Americans looking for work as of this morning? There is no market discipline. The too big too fail international corporations have no allegiance to any country. The shadow banking system is still alive and kicking. This crisis revealed that our tax dollars were used to cover the costs of resolving failing

international corporations that should have been paid by the owners and creditors of the failed institutions. The IMF is only good idea for the rich. It is squeezing every dollar out of Americans like a sponge.

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Looks like the decision has been made already for us. The banks are going to start shorting the dollar value.




The investment bank expects the dollar to drop to $1.79 against the pound in six months and $1.85 in 12 months. Sterling closed at $1.5891 in London yesterday. The euro won’t be spared either, with the dollar’s slump forcing it to $1.50 six months from now and $1.55 in a year’s time.


Powered by President Obama’s stimulus package and a rebound in inventories, the US recovery peaked in the final three months of last year and has been slowing ever since.


As the summer delivered a diet of weak economic data, the conviction has strengthened among a growing number of officials at the Federal Reserve that it should risk another bout of quantitative easing - printing money to inject into the economy.


“More QE is seen as a co-ordinated effort to get the dollar lower,” said Thomas Stolper of Goldman Sachs. “It makes sense for the US.”


Separately, Goldman’s chief economist, Jan Hatzius, warned that the world’s biggest economy faces a “fairly bad” or a “very bad" scenario over the next six to nine months.

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It is no wonder that the dollar is going to lose its value. We just keep printing money.


I just wonder how the stock market hit 11000. The only thing I can imagine is hedge funds must be going crazy.

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U.S. Exports


In 2009, U.S. exports decreased in all merchandise sectors, declining by 20 percent

overall to $936.7 billion (table US.1). The greatest absolute decrease was in the

transportation equipment sector, which fell by $63.4 billion (25 percent) to $194.1 billion

in 2009. Most of the decline occurred in motor vehicles and in aircraft engines and gas

turbine products,9 which fell $20.9 billion and $19.2 billion, respectively (table US.2).

U.S. exports of motor vehicles, which are primarily destined for Canada, Germany, and

Mexico, decreased due to the global economic downturn and the resulting decline in

demand for vehicles, as well as tighter credit.


The second largest absolute decline in 2009 occurred in the minerals and metals sector, in

which U.S. exports dropped by 30 percent to $84.4 billion. The largest decline in this

sector occurred in exports of steel mill products, which fell by 36 percent to $10.6 billion

(table US.2). Most of the decrease in U.S. exports of steel mill products was the result of

lower exports to Canada and Mexico caused by declining demand from automotive

producers and a contracting Canadian energy market.


U.S. exports of electronic products registered the third largest absolute decline in 2009,

falling by $31.9 billion to $143.0 billion. The largest decreases in this sector were in

semiconductors and integrated circuits, as well as computers, peripherals, and parts,

which declined by $10.8 billion (30 percent) and $6.8 billion (26 percent), respectively.

U.S. exports of semiconductors and integrated circuits declined due to the general

weakness in demand for semiconductors worldwide as well as the ongoing shift of

semiconductor production away from the United States.12 However, while the electronic

products sector registered an overall decline in U.S. exports, medical goods registered a

slight increase due to growing Chinese demand for medical goods products.


Significant Shifts in U.S. Bilateral/Multilateral Trade


China, the European Union (EU), Mexico, Canada, and Japan, the five main U.S. trading

partners, together accounted for approximately 78 percent of the U.S. trade deficit in

2009 (table US.3). The U.S. merchandise deficits with each of these countries declined in



The U.S. trade deficit with China, the largest with any single country, decreased by

15 percent to $230.4 billion, reflecting the general decrease in international trade

resulting from the global economic downturn. However, China remained the single

largest source of U.S. imports by value ($295.5 billion) in 2009. Recent U.S. trade

(primarily imports) with China has been influenced by China’s role as an important

location in a long chain of value-added production for many goods, including low-value

assembly industries.


The EU is the United States’ largest two-way trading partner, accounting for almost

20 percent of total U.S. merchandise trade in 2009. The U.S. trade deficit with the EU

declined by $36.8 billion (33 percent) in 2009, due to the shared economic downturn and

rising unemployment coupled with the worldwide financial and credit crisis. These

factors began to reduce bilateral trade between the two markets in the final quarter of

2008, and the trend continued through 2009, even as both economies began to show

improvements in the latter half of the year. 16 During 2009, U.S. imports from the EU

showed a much sharper decline (down $85.6 billion) than the fall in U.S. exports of

goods (down $48.8 billion) to the EU.


In 2009, the U.S. trade deficit with Canada, the largest single-country U.S. trading

partner, declined by $59.5 billion to $52.9 billion. Of particular importance was the

decline in the deficit within the energy-related products sector, which decreased by

43 percent to $54.2 billion and accounted for 69 percent of the total fall in the deficit with

Canada, primarily as a result of lower prices.

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U.S. exports to China, which had been steadily growing over the five-year period,

recorded a $2.0 billion decrease in 2009. U.S. exports of semiconductor manufacturing

equipment and robotics fell by $439 million (40 percent) to $659 million (table CHN.2)

and accounted for 36 percent of the total export decline within the machinery sector. This

shift reflects the sharp fall in China’s capital equipment spending between 2008 and 2009

that resulted from the industry-wide overcapacity and low utilization that materialized

with the global economic downturn. Reduced global semiconductor capital spending

(45 percent drop in 2009 over 20084) mirrored the overall capital equipment spending

decrease (46 percent in 2009), as semiconductor companies generally reduced their

inventories in the first half of 2009. As a result, U.S. exports of semiconductors and

integrated circuits to China fell by $1.1 billion (22 percent) to $4.2 billion. The decrease

in U.S. exports of semiconductors and integrated circuits accounted for over 90 percent

of the total export decline within the electronic products sector.


U.S. exports of agricultural products to China rose slightly, buoyed by a $2.0 billion

(27 percent) increase in exports of oilseeds, especially soybeans. Strong processing

margins in China for crushing soybeans into meal for animal feed and cooking oil

encouraged China to import more soybeans in 2009.6 Animal feed fuels the growing

livestock industry in China, while soy oil is used for cooking. The Chinese are

increasingly consuming more food on a per capita basis and are continuing to vary the

traditional Chinese diet (including consuming more meat) as incomes rise, particularly in

the urban centers.


Despite the overall increase in U.S. agricultural exports to China, U.S. exports of cotton

to China declined by 50 percent from $1.6 billion to $824 million in 2009. Chinese

import demand for cotton in 2009 was weakened by the government draw down of

domestic stocks from a bumper Chinese cotton harvest in 2008. In addition, demand for

cotton by China’s textile industry waned as recessionary pressures reduced global

demand for its textile products.


China was the largest foreign market for U.S. exports of iron and steel waste and scrap in

2009, recording the largest rate of increase for such exports (36 percent), in contrast to

the decline in U.S. exports of such products to other major industrial nations. As the only

major steel-producing nation that increased production in 2009, China’s demand for scrap

was high, and Chinese importers took advantage of lower demand and prices in the

United States to increase their purchases of scrap from the United States. Iron and steel

waste and scrap are raw materials for China's iron and steel foundry industries, which

produce key inputs to numerous downstream segments of the construction and

manufacturing industries.


U.S. exports of polyethylene resins in primary forms increased by $384 million

(54 percent) to $1.1 billion. Polyethylene is a thermoplastic, commonly used for

packaging, toys, plastic shopping bags, tubing, and machine parts, and is an important

input into China’s manufacturing sector. While U.S. domestic sales of polyethylene

decreased in 2009, the U.S. export gains of 2009 were fueled by a depreciation of the

U.S. dollar and by low-priced natural gas feedstock in North America that reduced U.S.

production costs. 10 U.S. exports of certain organic chemicals also grew, rising by

$273 million (27 percent) to $1.3 billion. These chemicals are used as inputs into China's

growing plastics, rubber, adhesives, and solvent industries.

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The long-standing trade deficit in electronic products decreased by $8.3 billion

(5 percent) as U.S. imports declined more than U.S. exports on an absolute basis

(table EL.1). Computers, peripherals, and parts; telecommunications equipment; and

consumer electronics accounted for 65 percent of total U.S. imports of electronic

products in 2009, and almost half (47 percent) of the decrease in imports (table EL.2).

Semiconductors and integrated circuits; computers, peripherals, and parts;

telecommunications equipment; and measuring, testing, and controlling equipment

together accounted for 54 percent of total U.S. exports of electronic products in 2009, and

for 76 percent of the decrease in exports.


U.S. exports decreased by $31.9 billion (18 percent) in 2009, reflecting declines in almost

all industries. Industries experiencing the largest decreases were semiconductors and

integrated circuits, down by $10.8 billion (30 percent); computers, peripherals, and parts,

down by $6.8 billion (26 percent); telecommunications equipment, down by $3.7 billion

(22 percent); and measuring, testing, and controlling equipment, down by $2.9 billion

(13 percent).


U.S. exports of computers, peripherals, and parts declined because of the global

economic downturn, as purchases of such goods are generally deferred during times of

economic hardship. Furthermore, the decline in U.S. exports of semiconductors and

integrated circuits is closely linked to the decline in demand for computers and

peripherals, as semiconductors are used as inputs to computer production. In addition, the

decline in exports of telecommunications equipment was in large part a result of the

decreased demand for network equipment by companies during the economic downturn.

The medical goods market, accounting for 20 percent of total sector exports in 2009, was

the only significant electronic products industry for which U.S. exports increased. The

less than 1 percent increase was driven by exports to China; these grew by $200 million

(20 percent) as the Chinese government attempted to reform the country’s healthcare

system and provide universal healthcare to its 1.3 billion citizens by 2011.

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The $10.8 billion (30 percent) decline in U.S. exports of semiconductors and integrated

circuits in 2009 reflected both the general weakness in demand for semiconductors

worldwide and the ongoing shift of production away from the United States. Worldwide

semiconductor industry sales contracted by 10 percent in 2009 due to the combined

effects of a 7 percent decline in unit shipments and a 3 percent decline in the average

selling price of integrated circuits. Capacity utilization in the global semiconductor

industry hit an all-time low in the first quarter of 2009; in the United States, capacity

utilization was just 37 percent in the first quarter. This contraction was due to lower

demand from all of the semiconductor industry’s major customers, including the

computer, telecommunications, consumer electronics, and automotive industries.

Production levels in industries that buy semiconductors fell by an aggregate 11 percent

between 2008 and 2009.11 The only end market for semiconductors that grew in 2009 was

the (relatively small) government and military equipment market.1


Also contributing to the decline in U.S. exports was the continuing increase in Asia’s

share of global semiconductor production. As manufacturing of electronics containing

semiconductors has moved to Asia, the semiconductor industry has largely followed in

order to be closer to its customers.13 This has led to the increasing prevalence of fabless

and “fab-lite” semiconductor companies in the United States. Fabless companies are

those that do not produce the wafers they design, instead contracting with foundries,

often overseas, to perform this activity. “Fab-lite” firms contract with foundries for a

portion of their wafer production. Half of worldwide industry revenues are expected to

come from these types of design and sales firms in 2010, up from only 15 percent in

2001. U.S. firms continued to shift toward fabless and “fab-lite” business models in

2009. The main beneficiaries of this shift to date have been Taiwanese foundries, but in

the past several years, investment has increasingly been moving to China. While

China’s share of global semiconductor production remains fairly small at present, it is

becoming an attractive location for the major producers in the industry, including U.S.

firms. For example, Intel, which does not outsource its wafer production, plans to open

its first Asian wafer fabrication facility in China later in 2010.


In general, the semiconductor manufacturing activities that remain in the United States

tend to yield products with higher unit values. This is likely due to both the product mix

in which the U.S. specializes and to the fixed costs involved in relocating capital intensive

activities such as wafer fabrication. The higher unit values of U.S. exports are

also a factor in the sharper decline in the value of exports as compared with imports, in

2009, as the reductions in the volume exported resulted in larger value declines.

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Guest David Weiseth

We took the money from the middle class, shopping stupid plastic stuff at Wal-Mart and put it in the vaults in China, so they can go around the world trying to buy people's loyalty and act the kingmaker . All the while the dragon was hiding a secret, they placed too much reliance on exporting to America, while America became a addict to cheap goods.

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