Chile's Place in Latin America

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Re: Chile's Place in Latin America

Post by admin » Mon May 07, 2018 1:27 pm

And, exports were up, imports were up due internal demand was growing, and looks like we are set for a positive trade balance.

The article below mentions half of exports were copper. Better, but chile still needs to move past the commodity tit, to develope. I think it is a mistake for chile to try and leap frog to things like fully finished products, but value added semi-finished products are possible in the short run.

http://www.pulso.cl/economia-dinero/exp ... seis-anos/

Unemployment numbers spiked, but that is atributed to lots of people re/entering the work force. Which considering 80,000+ people just got legal work permision, i am suprised it is not higher. Perhaps they will start showing on the next employment report.

Overall chile's economy is looking good. Could it get bad, yea; but, chile just came out of four bad years. Barring any major crisis, chile seems to be in a fairly good position to weather any global economic storms.
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bert.douglas
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Re: Chile's Place in Latin America

Post by bert.douglas » Mon May 07, 2018 1:35 pm

admin wrote:
Sun May 06, 2018 4:52 pm
Yea the trump trade war will be the final nail in the coffine of the u.s. economic dominance, and everything else it dominates depends on that economic power.
You are right about the long term gradual decline in us economic dominance. This is not a bad thing. But I don't think that talk of "coffins" or collapse is appropriate.

Things in the US are not as bad as portrayed by most media.
Likewise there are serious problems in China. [Ghost cities, mountains of excess steel, awful pollution, unserviced corporate debt]

US companies are starting to move manufacturing back to the US from China.
Even Chinese companies are setting up production inside the US. Foxconn is building a $200 billion factory near Racine Wisconsin.

How can China win a trade war when they are totally dependent on selling stuff to the USA? If China cuts off imports of soybeans from the USA, then China must buy more soybeans from Brazil. So the US will sell soybeans to other countries who were previously buying from Brazil. People literally can't live without soybeans. However, there is much less need for cheap large screen TVs.

As for steel import tariffs, the EU has for years imposed much greater tariffs on chinese steel. I don't see why the US gets so much criticism for doing the same thing.

The US is on track to be the largest exporter of crude oil this year. This supports the price of the dollar, and allows much more freedom in foreign policy.

Companies are massively increasing investment with money from the Trump tax reform. So I don't see a downward spiral.

Huelshoff
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Re: Chile's Place in Latin America

Post by Huelshoff » Mon May 07, 2018 2:25 pm

Gold is valuable to back up a currency because people value it beyond its immediate use in the production of goods. In other words, like the US dollar today (and all fiat currencies, for that matter) its value is based on nothing but confidence that you can get something for it. It could be anything that plays that role, and humans have used lots of things as a store of value (salt, sea shells, etc.). Central banks have been selling gold for a couple of decades now, backing their currencies with other currencies. It is indeed a big shell game. I think that if I was going to hold on to something of high, long term value to back up my currency, lithium is the way to go (absent a radical change in battery tech). Thus I am not too worried that Chile has so little gold holdings, although I worry a bit that Chilean central bankers may have followed the international example a little too zealously if its down as far as suggested above, as Chileans are wont to do when following international examples.

I fear that the trade war contributing to the collapse of the dollar argument may be getting too likely in the near future. There were articles in the NYT and WP over the weekend that suggested--but didn't prove--that Trump's business empire was funded by laundered Russian mob money starting about 2006. Before then, like most real estate developers Trump funded his acquisitions by borrowing (he used to call himself the "King of Debt"). After 2006 many of his acquisitions were cash, and about the same time his sons were talking about all the money they were getting from Russia. There are more moving parts here, but the upshot is that there is beginning to be hard evidence that Trump is blackmailable by the Kremlin. So, what does he do if this is true? Lash out, and trade is one area where he can have a direct impact without killing millions of people by starting a war in Korea or the Middle East. Trump's ideas on trade are, to say the least, untethered to reality in my opinion. I think of all the fundamentally stupid things he has said about economics--"reciprocal" trade, not paying government debt--and I wonder that we haven't already fallen down the rat hole.

Admin, did you get my email of three weeks ago? I sent it to law@spencerglobal. Thanks.

bert.douglas
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Re: Chile's Place in Latin America

Post by bert.douglas » Mon May 07, 2018 2:38 pm

Huelshoff wrote:
Mon May 07, 2018 2:25 pm
... There are more moving parts here, but the upshot is that there is beginning to be hard evidence that Trump is blackmailable by the Kremlin. ...
Huh? All the recent negative actions of Trump towards Russia would seem to render this theory dead.

https://www.nytimes.com/2018/04/06/us/p ... archs.html

https://www.axios.com/us-strikes-killed ... 097ee.html

Huelshoff
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Re: Chile's Place in Latin America

Post by Huelshoff » Mon May 07, 2018 3:01 pm

I'm less sanguine on the US economy. Yes, the unemployment rate dipped below 4% last week. Yes, we aren't in a trade war yet. But the threats of trade wars have already sending soybean futures down (and farmers are by definition dependent on futures markets), and the steel and aluminum tariffs have already sent those prices (and everything that uses steel and aluminum) up. The stock market is choppy, and that is usually a sign of an impending recession--one that is by past experience overdue. As for the wave of new investment unleashed by the tax cuts:

https://www.nytimes.com/2018/02/26/busi ... orate.html

To be sure, we may see an uptick in investment and job growth from the cuts in the long run, but for now, as during the Bush tax cuts, the money is going into dividends and stock buybacks (92% after the Bush cuts), not wages and investment. Any increased growth that they might have generated were swamped by the Great Recession. Could happen again.

As for Trump and Russia, I'd have to say that the signals are at best mixed. The Trump administration is not implementing the sanctions package that he signed a year ago, he still won't admit that Russians were involved in the election, and even as he says that "there is no one tougher on Russia than Trump" (not an exact quote) he still congratulated Putin on his "election" victory, and invited that murderer to the White House. By the way, that strike on Russian mercenaries you referenced above came about after they were seen to be preparing to attack US and allied forces. Imagine the reaction is they hadn't attacked the Russians--I doubt Trump was even consulted. Again, the evidence in the articles I cited above is only suggestive, but if the Giuliani-Trump craziness over the last few days is any indication Trump is feeling the heat from somewhere.

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Re: Chile's Place in Latin America

Post by Britkid » Mon May 07, 2018 5:47 pm

I think the West (including some African and Latin American countries) is too in bed with China economically and countries should strategically plan to increase firstly production within their own country, secondly production within countries in their region. E.g. Mexico for US.

A large amount of production from Asia to the West would remain inevitable in practice so we should I think expand production to other countries such as India, Bangladesh, Malaysia, partly as a diversification strategy and partly because those countries are arguably more ethical to deal with.

It makes it harder to speak out against China's human rights abuses when you are in bed with them economically. Likewise it will make it harder to address future issues with an open mind (e.g. if Taiwan declares independence and is invaded by China).

According to the latest Freedom House report assessing freedom in the world, out of 209 countries/territories, India is 77th, Philipines is 105th, Bangladesh 132rd, Malaysia 133rd, China 185th.

According to the latest Economist democracy index, India is 42nd, Philipines is 51st, Malaysia is 59th, Bangaldesh is 92th, and China is 139th (of 167 countries).

So China is by far the worst of the major Asian countries according to these reports. This is not about imposing a Western system of governance on anyone. It is about suggesting countries allow basic human rights.

I personally probably would not make a major purchase of an item from a China headquartered company right now. For example a car, a smart phone, something like that. Something that you actually think about rather than just pick the first item off the shelf. In such cases, I just won't buy from China until they become a more ethical country. To do so is to support a government that makes intellectuals and in one case a nobel prize winner disappear and die for doing nothing wrong. Remember, the government in China controls all the major companies and is therefore arguably the most powerful and dangerous government in the world by far.

So I don't think that Chile (or anyone that cares about human rights) should get deep ties with China.
In 2014/2015 I blogged about my life in Chile. http://web.archive.org/web/201601121940 ... age_id=268

Huelshoff
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Re: Chile's Place in Latin America

Post by Huelshoff » Mon May 07, 2018 6:04 pm

I think that it is probably pretty hard to buy much of anything complicated these days that hasn't passed through China and/or a Chinese firm, given global supply chains. But that is not the only way the Chinese influence the world. My oldest daughter is in the Peace Corps, on the eastern Caribbean island Dominica. Dominica was plastered by Hurricane Maria before it hit Puerto Rico. Its a former British colony, so there are some Brits there helping to rebuild, as well as USAID. Yet the biggest presence is Chinese, both before and after the hurricane. In the eastern Caribbean. This is being repeated throughout the world, and not just in disaster areas.

By the way, she has been living without electricity since she returned to Dominica in November. Tough kid--much tougher than her dad who needs his cold beer while watching sports on the weekend.

41southchile
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Re: Chile's Place in Latin America

Post by 41southchile » Mon May 07, 2018 11:24 pm

And now China telecom wants to come to Chile I just read online. And by all accounts Chile is going to bend over and give them what they want
http://www.latercera.com/la-tercera-pm/ ... le/156087/
In the Lakes Region Chile for 6 years. It looks like New Zealand in some ways, and is nearly at the bottom of the world too, but there the similarities end.

41southchile
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Re: Chile's Place in Latin America

Post by 41southchile » Mon May 07, 2018 11:45 pm

Britkid wrote:
Mon May 07, 2018 5:47 pm
I think the West (including some African and Latin American countries) is too in bed with China economically and countries should strategically plan to increase firstly production within their own country, secondly production within countries in their region. E.g. Mexico for US.

A large amount of production from Asia to the West would remain inevitable in practice so we should I think expand production to other countries such as India, Bangladesh, Malaysia, partly as a diversification strategy and partly because those countries are arguably more ethical to deal with.

It makes it harder to speak out against China's human rights abuses when you are in bed with them economically. Likewise it will make it harder to address future issues with an open mind (e.g. if Taiwan declares independence and is invaded by China).

According to the latest Freedom House report assessing freedom in the world, out of 209 countries/territories, India is 77th, Philipines is 105th, Bangladesh 132rd, Malaysia 133rd, China 185th.

According to the latest Economist democracy index, India is 42nd, Philipines is 51st, Malaysia is 59th, Bangaldesh is 92th, and China is 139th (of 167 countries).

So China is by far the worst of the major Asian countries according to these reports. This is not about imposing a Western system of governance on anyone. It is about suggesting countries allow basic human rights.

I personally probably would not make a major purchase of an item from a China headquartered company right now. For example a car, a smart phone, something like that. Something that you actually think about rather than just pick the first item off the shelf. In such cases, I just won't buy from China until they become a more ethical country. To do so is to support a government that makes intellectuals and in one case a nobel prize winner disappear and die for doing nothing wrong. Remember, the government in China controls all the major companies and is therefore arguably the most powerful and dangerous government in the world by far.

So I don't think that Chile (or anyone that cares about human rights) should get deep ties with China.
You wont buy anything from China untill they become a more ethical country ? How do you think that will happen ? Face it most of the west have totally miscalculated China and have only just recently started to work out how China works in the last few years or so.
Westrrn Democracy, freedom in.China ?
You have more chances of the US not killing anymore innocent civilians anywhere in the world in "collateral damage" ever again than you have of China suddenly changing their ways just because they are listed way down the list on a couple of European lists of whatever or because you are not buying Chinese products.
I think Chile or anyone that wants to be on side with the up and coming most powerful country in the world doesn't give a shit about Chinese human rights to be honest.
In the Lakes Region Chile for 6 years. It looks like New Zealand in some ways, and is nearly at the bottom of the world too, but there the similarities end.

at46
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Re: Chile's Place in Latin America

Post by at46 » Tue May 08, 2018 12:42 am

bert.douglas wrote:
Mon May 07, 2018 1:35 pm
Even Chinese companies are setting up production inside the US. Foxconn is building a $200 billion factory near Racine Wisconsin.
This here says it's a $10 billion investment https://patch.com/wisconsin/mountpleasa ... st-company

at46
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Re: Chile's Place in Latin America

Post by at46 » Tue May 08, 2018 1:06 am

Britkid wrote:
Mon May 07, 2018 5:47 pm
I personally probably would not make a major purchase of an item from a China headquartered company right now. For example a car, a smart phone, something like that.
GM sells more autos in China than elsewhere, even though it's headquartered in the US. Would you buy a Chevy? How about an iphone? You know that it's made in China and that Apple derives a great portion of its revenue from China. Is an iphone an ethical enough product, in your opinion? How about garlic? Most garlic you consume in Chile comes from China. Where do you draw the line?

41southchile
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Re: Chile's Place in Latin America

Post by 41southchile » Tue May 08, 2018 2:57 am

Huelshoff wrote:
Mon May 07, 2018 6:04 pm
I think that it is probably pretty hard to buy much of anything complicated these days that hasn't passed through China and/or a Chinese firm, given global supply chains. But that is not the only way the Chinese influence the world. My oldest daughter is in the Peace Corps, on the eastern Caribbean island Dominica. Dominica was plastered by Hurricane Maria before it hit Puerto Rico. Its a former British colony, so there are some Brits there helping to rebuild, as well as USAID. Yet the biggest presence is Chinese, both before and after the hurricane. In the eastern Caribbean. This is being repeated throughout the world, and not just in disaster areas.

By the way, she has been living without electricity since she returned to Dominica in November. Tough kid--much tougher than her dad who needs his cold beer while watching sports on the weekend.
Yes, they are doing the same in Vanuatu as well with a big new port and many many loans to finance things such as said port and warf, when the Vanuatu government can't pay back loan China takes control of the infrastructure for their own use. China trying to strategically gain control of the Southern Pacific makes me wonder when they will start moving over to PuertoMontt/Patagonia too to control this side
In the Lakes Region Chile for 6 years. It looks like New Zealand in some ways, and is nearly at the bottom of the world too, but there the similarities end.

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