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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review May 19, 2005 / 10 Iyar, 5765

The ongoing muddle of U.S.-Chinese trade

By George Friedman


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http://www.JewishWorldReview.com | The United States has told China that it expects a revaluation of the yuan within six months. This comes on top of moves to limit the import of Chinese textiles into the United States and discussion in Europe of a similar move. In response, Chinese Premier Wen Jiabao said May 16 that China's exchange rate is the concern of China, a sovereign country, and that Beijing will not bow to foreign pressure to let its currency rise.

The pressure of Chinese exports on the United States is becoming unsupportable. Economists like to think it's all about economics, but it isn't, except in a particular micro way. Export surges do not affect all Americans similarly: Some are enriched by it, others benefit from lower-priced exports, and still others can be completely devastated. Economic effects are not equally distributed, but are confined to particular sectors and regions.

In economic theory — or fantasy — the ideal solution is to accept the low-cost imports, abandon the affected industries and move on. In the long run or in some moral sense, that might be a good idea. In reality, though, that just isn't how the world works. Those who are being devastated do not respond at the economic table. They move to the political table, where they bring pressure on the government to protect them.

For a small group that profits immensely from China trade, there is a motivation to fight back. For the vast majority (think Wal-Mart shoppers) who enjoy Chinese exports, the motivation on an individual level is much smaller or nonexistent. But if the size and strategic position of the major losers reaches critical mass, the government will start shifting policy. That is what is happening now, and it was unavoidable.

The dilemma is that the Chinese have their own problems. Logically, they could defuse the situation by reducing export pressures on the United States: They have a huge economic pie, and they could give up a bit. Except that they can't. The Chinese financial system is a shambles, and Beijing needs the massive outflow of exports to support the system. In this case, while cutting exports makes political sense, it doesn't make economic sense. Not only can China not reduce the export surge, Beijing wants to increase it. Plus, it has its own sectoral and regional problems. Unemployment has caused substantial unrest in China; exports keep people at work.

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Now, the pressure from the United States is not nearly as great as it looks. Giving China six months to revalue is the same as giving it forever. Who knows what things will look like in six weeks? Put another way, the Bush administration told the Chinese that they have six months before they have to do something. The administration does not want a confrontation with China, so Washington made a nasty face at the Chinese and gave them a long deadline.

But the administration is not in control of the situation, and neither are the Chinese. Political pressure is mounting for President George W. Bush, and he is not strong enough to resist it. He has other places to spend his political capital. Beijing is not in control of the situation, so it cannot cut exports or revalue the yuan easily. The two major powers have limited room for maneuver.

The Chinese do not really believe the Americans will take effective action. The Americans cannot believe that the Chinese won't, in the event, revalue. Both may be right. Some revaluation is possible, and U.S. trade sanctions rarely bite. There are too many other ways to sell things to the United States — say, through Europe as repackaged goods.

What is important now is to compare the economic atmosphere of a year ago to the atmosphere today, and observe the trend lines. The situation is deteriorating, and things are being said at the official level that never would have been said a year ago. This is getting interesting indeed.

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George Friedman is chairman of Strategic Forecasting, Inc., dubbed by Barron's as "The Shadow CIA," it's one of the world's leading global intelligence firms, providing clients with geopolitical analysis and industry and country forecasts to mitigate risk and identify opportunities. Stratfor's clients include Fortune 500 companies and major governments.


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