A much needed burst of optimism http://www.telegraph.co.uk/finance/...44646/World-power-swings-back-to-America.html
really?? I find this hard to believe since the avg minimum wage in China is roughly $160 a MONTH! Now throw in all the other regulations/costs we have here in the US with insurance, 401k, etc.. oh and dealing with labor unions. The cost gap is HUGE. You cant find anything made in the US anymore and I seriously doubt in 5 years much of that will change. Almost everything you buy will still say Made in China underneath. Now the other items in the article seem intriguing especially about the natural gas.
You're right, that's eexactly what he meant, and I'm sure Americans are dying to get those jobs back making t-shirts and napkins with manual labor and they don't want to develop from that point onwards. Now that's job creation, bring jobs back from the past!!
Don't be a hater, we are just going to raise the prices of food for the people that don't open their markets to us. Hey Middle East, you want food? Lower the price of the Oil or starve. DD
The problem is we have shipped the jobs over ther. Buidling a factory does take a lot of capital and time to build up. It also takes expertise in manufacturing, statistics, and quality control, but the Chinese seem to be not so great at QC part. However industries like the semiconductor industry is not coming back as billions have been invested in the east.
You make some good points, especially about the basic wage gap, but the "regulations" boogieman and the unions boogieman need a bit of debunking. Here's a start: http://2.bp.blogspot.com/_otfwl2zc6Qc/TUWbVZ16InI/AAAAAAAAO4I/VxVlHEMn4Iw/s1600/union.jpg (sorry -- I pasted the image but it was just too enormous for some reason.) For the regulations bit, see the recent blast from Jan Eberly on the lack of correlation between uncertainty in regulations and overall economic activity and investment per sector, just as a wee starter. (I know it's not the same as the overall impact of the existence of regulations, broadly, but I've never seen a data set that was very convincing on that front either. It all just sounds like anti-government flim-flam without more to back it up.)
Up until two years ago, the US manufactured more total product than China - as a percentage, it's a much smaller piece of our economy but we still manufacture quite a bit. Our workers are substantially more productive, plus if you produce stuff here, you don't have to ship it here. So those help make up the ground on wages. http://www.manufacturingdigital.com/news_archive/tags/us/china-vs-us-manufacturing-comparison However, productivity is still a massive issue. IHS's Head of World Industry Services Mark Killon points out: “The US has a huge productivity advantage in that it produced only slightly less than China’s manufacturing output in 2010 but with 11.5 million workers compared to the 100 million employed in the same sector in China.”
Good thing only Americans know how to feed themselves. The Ottomans and Persians ate sand before we came along.
Here's some more detail from the original article: "Made in America, Again" - a report this month by Boston Consulting Group - said Chinese wage inflation running at 16pc a year for a decade has closed much of the cost gap. China is no longer the "default location" for cheap plants supplying the US. A "tipping point" is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture. "A surprising amount of work that rushed to China over the past decade could soon start to come back," said BCG's Harold Sirkin. The gap in "productivity-adjusted wages" will narrow from 22pc of US levels in 2005 to 43pc (61pc for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US. The list of "repatriates" is growing. Farouk Systems is bringing back assembly of hair dryers to Texas after counterfeiting problems; ET Water Systems has switched its irrigation products to California; Master Lock is returning to Milwaukee, and NCR is bringing back its ATM output to Georgia. NatLabs is coming home to Florida. Boston Consulting expects up to 800,000 manufacturing jobs to return to the US by mid-decade, with a multiplier effect creating 3.2m in total. This would take some sting out of the Long Slump. As Philadelphia Fed chief Sandra Pianalto said last week, US manufacturing is "very competitive" at the current dollar exchange rate. Whether intended or not, the Fed's zero rates and $2.3 trillion printing blitz have brought matters to an abrupt head for China. Though I do wonder why China vs US are the only options. A while back, I had heard that US factories were starting to move from China to Vietnam and other smaller places like that. It always seems to be a race to the cheapest labor, and there is still stuff out there much cheaper than China.
At some point the only option will be for all the countries to default and start over. Bailing out the banks is the wrong thing to do. DD
That won't happen and you know it. The people buying debt are not going to magically waive everything, especially when some countries have a surplus going.
Food and shelter, football and basketball, rock and blues, broadband and air conditioning ... that's all you need anyway
that article seems to hint at shale being the energy of the future? is that where we're heading? seems like every couple months its something new in terms of the future of energy. first its wind, then its ethanol, then its electric, now its shale.
The people buying debt have no power, if someone defaults, they default...what are they going to do? They have no army to come after countries that owe them money. IMO, the USA should immediately stop paying interest on any debt that is not owned by US citizens, and then pay off the principal only on the rest of the debts. Nationalize some banks and away we go..... DD
If we default, the US dollar will no longer have much value, and that's essentially how the US is living at the level it's living on; the idea that the dollar is worth something.
I don't think the US can do it alone, I think it has to be a large group of countries restructuring at once.... DD
