I’m just wondering! Lately, the headlines are screaming that China is devaluing the Yuan to help cushion the blow of Trump’s tariff on China’s exports to the United States. Although this is a legitimate concern that the headlines raise, I’m wondering if there is another hidden motive for the Yuan to slide.
Could it be that the Chinese government is letting the Yuan slides so the treasury bonds that the Chinese own which Americans are in debt to China could stay valuable? This way China can begin to sell the treasury bonds while the treasury bonds are still valuable. Once China unloads enough of the treasury bonds onto the market, whatever value China receives from such transaction could then be converted to other favorable assets, investments, and currencies.
Of course, China could always convert the selling of treasury bonds into Yuan and then raise the Yuan’s buying power back up to stave inflation — but then it could begin a deflation. How? Well, if too many Yuans that are chasing the same thing could raise the price of whatever, but when the buying power of Yuans get push up the Chinese government then could lend out these Yuans to other countries and International projects such as Belt and Road Initiative projects to stave inflation. A more powerful Yuan could also allow the Chinese to get more bang for the buck whenever they use the Yuans to acquire whatever. Thus they also have to be careful about the deflation.
I’m no economist and so I could be wrong on what I’m suggesting. Nonetheless, I would love to hear other people’s opinions on the suggestion that I’m suggesting. Am I wrong? Am I even close?
Yahoo’s headline “Trump signals he’s open to mileage tax with praise of Oregon program” suggests that Trump is exploring the idea of having to tax people for driving to work. I don’t think this is a good idea at all. I know people who are going to work one hour away from home because their circumstances don’t allow them to work any closer to home. The moral of having to tax a poor person to try to get to work is so weird and not making any sense in any way at all in my opinion.
In my opinion, the gas tax is already a transportation tax because the more people drive the more tax they have to pay since they have to pump more gas. Adding a mileage tax on to the top of the gas tax is like double taxing an individual. What’s worse the mileage tax will make a poor person pay even more than they could afford for just going to work.
Luckily, the gas prices aren’t so high at the moment and so the gas tax isn’t a problem. I remembered sometimes back in my area people were panic when gas prices jumped near $5 if my memory serves me right. If the gas prices are going to jump back to $4 or $5, how are people going to fare with mileage tax and gas tax at the same time?
In my opinion, I don’t think mileage tax will help spur the economy in any way, and this will make the economy poorer in the long term. I don’t think you have to use any imagination to guess that if people fear of driving far to get anything or to have any fun, how would this spur the economy overall? Malls may stay even emptier and local tourism may feel the strain.
Unreasonable mileage tax will drive the economy poorer. It would make poor people who have to drive far to get to work poorer. It would also put poor people in a position of finding less productive jobs that are closer to their living space, thus it would reduce their spending power in general. Basically, I don’t think it’s a good idea at all!