Plain and simple what the Yuan devaluation means is that China can no longer compete with Vietnam, the Philippines, Thailand, Malaysia and the other rising child sweatshops.
Now an $.80 minimum wage is more than the market can bear. It's a race to the bottom ending at the bottom. An inevitable consequence of Jack Welch's "factories on barges" constantly moving to the next cheaper locale. Playing off one country against another, Grapes of Wrath Style.
And no one, not the Krugman pseudo-"Keynesians", not the Money Printing Monetarist Morons, not even the fabled always-responsible "Austrian" economists have figured out that there is more than enough poverty for everyone under Globalization. Billunaires were too busy monetizing poverty and otherwise rolling around in their fake wealth to realize it was all a fucking denialistic fantasy. Like Etraders buying Netflix, a momentary self-delusion of wealth.
They all had one thing in common - they all desperately wanted to believe in the Walmart economy, right to the very end. The self-destructing free lunch. Buy in one locale at one price and sell in another at a higher price. Arbitrage. Finance 101 for total fucking idiots.
Today's specious boy-men telling us constantly that trade deficits don't matter and quoting 100 year-old nonsensical gibberish, need to get a lesson in Econ 101: Capital Account = Current account. Trade deficits equal debt accumulation. Yet again, the Idiocracy thinks that they've stumbled onto the secret to effortless wealth - outsourcing the entire economy. Mercantilism has been tried many times throughout history and it's called "Beggar Thy Neighbour" policy for a reason:
We could trust lying gibberish or just open our eyes to see that failed trade policy is leading to mass unemployment.
Human history's largest game of musical chairs, visualized:
"And then everyone retired at the exact same time..."
Manufacturing employment (blue). Labor participation (red):
In other words they still don't get it. Why? Because to date, it's been everyone else paying the price for this Ponzi model and not them.
That will change. And then the underwear will be mighty stained. When the Idiocracy figures out that their "best and brightest" are neither.
When the music's over, and there are no chairs left for anyone, then everyone will be on the same page, and the denialists will be shut the fuck up. The silence will be deafening.
