Originally Posted by Bravo1-3

This is something of a hot button topic for me. Free trade only works when the parties involved play fairly. China, and to a lesser extent Europe are waging economic war on this country, and we're happy to sell them the bullets to do it at everyday low prices.

China has issues that make it not just "difficult", but impossible to compete with. They have NO incentive for production efficiency because of their infinite labor pool and full employment policy. If they have to have 5 people to do the job of 1, so be it. If they have to use 5x the resources to produce quantity X of product, so be it.

They actually have reason to not be interested in efficient production. But they use their banking system and government like a weapon, fronting the money to buy whatever is needed to remain in the market, and artificially compensating to stave off negative feedback like the export effect. They can't do this forever, but they don't HAVE to. All they need to do is keep it up long enough for the other economic powers to drop out.

The europeans have almost had it. They didn't cheat by devaluing their currency, and the export effect has bitten them in the ass. Now all they can do is use indirect tariffs and subsidies to keep afloat, and even that isn't working.

I give it 2 years until gasoline costs more than $5 per gallon in the US because of Chinas inefficient use (and thus excessive buying) of oil. Ask yourself what that is going to do to the US economy? Somehow we've managed to absorb gas prices in the $2 range without an inflationary spike, but I thnk that's going to change this summer as prices get into the mid to high $2's and low $3's.

Sound a bit negative? Does to me too, but that's how I see it.