US and Mexico strike trade deal


#1

I’m delighted with a trade deal, wait for specifics


#2

I didn’t get the impression that the Fed would be tightening too much last week. Gold went up.


#3

details are light, but the below was encouraging

Under the revised terms of the agreement, 75 percent of a car would have to be manufactured in North America, up from 62.5 percent under current rules, according to a person familiar with the talks. The new rules would also impose a sort of minimum wage for car makers, requiring that workers earn a minimum of $16 per hour to qualify for zero tariffs.


#4

Beginning of wage inflation maybe? The Fed’s watching this one.


#5

Is that not some type of Bernie Sanders thing?


#6

I could live with a little wage inflation. I sometimes wonder whether the Fed always reacts to the right things. I will always believe Greenspan overreacted to price flatness. I think he thought it was incipient deflation when I suspect it was nothing but a rush of cheap foreign goods into this country based on trade liberalization.

And I really do think Bernanke overreacted when he jacked up interest rates to nosebleed levels in reaction to real estate inflation, and crashed the economy in 2007/2008 as a result.


#7

I recall fair wages was part of the original NAFTA, just not enforced.


#8

Maybe. Might simply be a “get more efficient at those wage levels or lose the business” kind of thing. After all, American manufacturers are paying more than that, but at least it removes some of the premium on other countries keeping their wage levels low.


#9

Only reached 5%, which historically was par for the course. The mistake Bernanke made was in stating in 2005 house prices would never go down, encouraging home flipping and such.


#10

It was high for the time, going from about 1% to 5.5% in approximately two years. Remember, that was the Fed Funds rate, which is always significantly lower than retail rates.


#11

Yes but Greenspan had drastically reduced them after 9/11 to that 1%. Was accused by Ron Paul et al of screwing savers, pensioners, and insurance companies. Among other things.

CD rates are still low, some banks offering less than 1% on 10 years for depositors’ money. Hardly a good sign of a healthy free-market economy.


#12

I didn’t say Bernanke was wrong in raising interest rates. I think he was right in reversing Greenspan’s ultra-cheap money policy. It was just too late and sent the economy into the tank.


#13

While this article is very pro trump, I really agreed with this paragraph

Trump understood the simple math that countries with which we have trade deficits would have to come to the negotiating table. By definition, we buy more from them than they buy from us, which gives us the power any major consumer has over a seller. These countries also cannot afford to lose access to our $20 trillion economy—the world’s largest. Trump realized the power this gives us and decided to use it to level the playing field for American workers—unlike other recent presidents.
http://www.foxnews.com/opinion/2018/08/27/trump-replaces-nafta-and-triumphs-new-trade-deal-with-mexico-is-yuge-win-for-both-countries.html


#14

Here is an interesting perspective, from Hong Kong
https://www.scmp.com/comment/insight-opinion/united-states/article/2161478/trumps-trade-war-unintentional-attack-chinas


#15

I believe Greenspan waited till after the 2004 elections to really start on raising rates. Then Bernanke continued with measured .25 hikes, no breaks. As a saver, I used a ladder approach in purchasing CD’s. Worked pretty well through the 2007-8 stock market collapse and beyond. Now in order to get half of those returns, you need to go corporate with much more risk.


#16

If they regard the American system as free market, I’m definitely not investing in China.


#17

I wonder if they factor in goods AND services into their equation as opposed to goods alone. I say this because of what Trump and Trudeau discussed in their trade talks, reaching no apparent agreement.


#18

Services to Mexico are included in the negotiations. Services are included as part of all reporting on trade balances.


#19

So will they renegotiate when the peso drops dramatically against the dollar or vice versa?


#20

whose making the parts


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