Tuesday, February 10, 2009

Foreign Students No Longer View US As a Land of Opportunity

I had a long discussion with a someone who is a Chinese national on Saturday. The individual is a manager in a manufacturing firm in the New York City area and a weekend MBA student at NYU's Stern School of Business. This student mentioned to me that her Chinese expatriate friends regret coming to this country and are now thinking of returning to China because of America's declining economy, its incompetent policies and its unwillingness to confront its own decline.

Moreover, she was disturbed at the recent inflation of the American monetary base and the foolhardy bailout plan that the American mass media cheers. She said that hyper inflation has begun to afflict China, and the Chinese are not happy either with the American monetary policy or the fact that they are holding over one trillion dollars in treasury bonds.

Obviously, if the Chinese decide to sell some or all of the US bonds, there will be a dramatic decline in the dollar and hyper inflation as dollars return here. Over the long run factories would return here, but the adjustment would take decades.

In my view, the United States is no longer a free country. It is a slave state. Americans in many states, such as New York, pay more than one half of their earnings to the government. Only foolish slaves would be happy to live in this condition. Americans have become a nation who do not deserve the world's respect.

On May 13, 2008 I wrote a blog entitled "Chinese Tragedy Ahead". I wrote that:

'This country and China have squandered resources in stupid ways. The bubble will burst as all credit bubbles do. America may have enough resources to reassess its errors. The Chinese likely do not, and many there will be hurt."


Ugur Yilmaz said...

Dear Professor Langbert,
I totally agree with you regarding what you said about Chinese and US economies.
And, in my humble opinion, US is playing high by fully opening its economy to China. Not surprisingly, almost everything is "Made in China" in the US marketplace. I think both Chinese and US economies became dependent of each other. China has to sell to US, whereas US has to borrow predominantly from China so as to keep consuming. If one of these economies goes down, so does the other.
Let's hope that both recover. This is best for the world.

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