It's Not Just the Outsourcing-- It's About Being Beaten Economically

[JCMach1]

Sitting in the Dr.'s office waiting for an allergy appointment it struck me as I was reading a glossy Gulf News circular on India: the sleeping economic giants of Asia have awakened.

It is China and India who will play a much larger role in the international community in the 21st century.

India's economy is on a tear. It's spanking the U.S. and much of the rest of the world in terms of REAL growth.

Jobs are leaving the U.S., but it's the fundamentals underneath that which show the Asian shift in terms of global economic power.

They are even finding major new oil resources after MANY years of no exploration.

America as we know it (politically and economically) is unravelling around us. We should have learned the lessons of the Cold War that left the Soviets bankrupt. Sure, the cold war ended but someone forgot to tell the U.S. military. Now, going on 20 years after the fall of the Berlin wall those bills need to be paid... the chickens are coming home to roost.

[Nicholas D Wolfwood]

1. China is the real future

For the sole reason that China has a larger, better educated work force than anyone. It's only a matter of time, really.

However, I disagree with your assessment that we are in dire straits as a country. The tide can still be turned - we just need to rid ourselves of Shrub immediately.

[starroute]

10. I've seen things lately saying India is going to outpace China

The Indian population is, on average, more highly educated. It's also younger -- China's one-child policy has resulted in an aging population.

India's economic development is more home-grown. It hasn't depended on massive foreign investment, and it hasn't been based on selling cheap goods to other countries.

India is a more open society. India is strongly encouraging the spread of Internet access, where China keeps trying to censor it. China is in the untenable position of trying to allow economic freedom without political freedom, and that is going to lead to increasing unrest. China is also having major problems with corruption.

India is quietly maneuvering for great-power status. As nearly as I can tell, this involves (1) avoiding war with Pakistan and promoting a South Asian trade zone of which India would be the center and (2) forming connections with both Israel and (more tentatively) Iran, with the long-term aim of setting up an alliance of non-Arab nations that would dominate the Middle East from both ends.

I myself don't know whether it's India or China that is ultimately going to come out ahead. But I think it's interesting that after several years where all we've been hearing is China-China-China, people are suddenly starting to notice that India is positioning itself very shrewdly for success in the long run.

[SaddenedDem]

2. And the Berlin Wall is being rebuilt in Israel n/t

[tom_paine]

7. Sad but true, Saddened Dem

Sad but true.

[ma4t]

13. Sorry, I can't let that go by

Forgive me if this post seems a little too strident but I cannot allow SaddnedDem's post go without rebuttal.

There is no resemblance between the Berlin Wall and the Israeli security fence or wall beyond the obvious fact that they are both "walls".

The Berlin wall (and the border fence between East and West Germany) was put up by a despotic government in order to keep its own subjects in. Any East Berliner who attempted to flee would be gunned down in cold blood. People tried to get across the wall for no other reason beside a desire to live a productive life in a free environment. Those who sought to escape wished no harm to anyone. Like Reagan or hate him he did point out the indisputable fact that the Berlin Wall was nothing more or less than the wall of a prison.

The fence being constructed in Israel is totally different. The purpose is not to keep Israelis in, it is to keep terrorists out. Anyone in Israel who wishes to depart is free to do so. Many of those who will attempt to get around the fence in Israel will do so with the specific purpose of killing or maiming innocent civilians.

Anyone with the slightest historical knowledge and sense of intellectual honesty can easily see that there is no rational comparison between the Berlin Wall and the wall being constructed in Israel. SaddenedDem's post is nothing less than a slander.

[junker]

3. false.. Asia is not the econ powerhouse you presume. Yes slaves can

Yes slaves can produce a huge amount at low cost, but there is no there there. Infrastructure does not exist except to support pockets of business. The electrical power grid in China is a joke. They are having so many power problems that the number one comsumer item being sold (big ticket) is now diesel gensets. These are efficient to a degree, but not adequate to run a nation.

It gets worse the further out one goes. So to presume these are modern or emerging nations is slightly askew as no nation can survive these days without adequate infrastructure to support a home consumer economy.

Once the multinationals have moved all the jobs they can out of USofA/EU to slave factories abroad, the whole thing comes crashing down....why? Cause there won't be any 'rich americans' or EUzonerites to purchase the vast quantities of goods that Asia can produce.

And note that right now, cap utilization in USofA is falling (low 70s) meaning we don't use the factory space we have here, yet nominally American firms such as Intel are spending billions on factories in China whose production we would not possibily be able to consume.

So if the Asian miracle does not create a vast consumer economy in the next 3 years, the whole ponzi scheme comes to a halt.

It may happen earlier as the dollar is about to take its first of 3 jumps down. This will be a big one and will send ripples through the whole financial system.

[cryofan]

5. what can a small investor do to mitigate/hedge the dollar fall?

What can I do to beat the dollar fall? Will ADR's like Vodaphone and TSM, etc, go up as the dollar falls?

I use Scottrade? Is there anything I can do there to take adavantage of the fall of the dollar?

[leftyandproud]

18. buy physical GOLD and SILVER

I personally prefer silver at today's prices. If you shop around (Ebay, etc) you can find a nice roll of 20 beautiful 1-ounce silver eagle coins for around $160.00

http://www.kitco.com has good news and editorials about the precious metals markets

[F.Gordon]

6. Good points

My understanding is that the China-Ind power could reach a point where it doesn't need the U.S. consumer. They are stealing away our trade relations faster than you can say "Mission Accomplished".

[F.Gordon]

4. It baffles me why this is being ignored

Maybe it's too complex to understand. Maybe people in the U.S. are so arrogant that they can't grasp the reality of it.

There is still speculation as to when and how, but I've seen no disagreement that it will occur. On our current path the United States will become a 2nd rate Economic Power, maybe even a 3rd rate Power. Even Russia wants to put its Oil Industry into the Euro market because it can't make money using the dollar.

Meanwhile, Bush* ties up most of our 120 person economic Trade team negotiating with Quatar for over a year. Qautar? WTF!!

Halliburton is just the tip of the iceberg, and it pisses me off when repukes dismiss the relevance of companies like Halliburton in relation to our current economic climate as just "liberal rants". They are so busy worrying about gay marriage that they can't see what Bush* is doing to this country.

Bush* is trying to wrap this country around a select group of Corporations. Just follow the money..... take a close look at the military contracts Bush* has made with Pakistan. Clinton understood the danger Pakistan posed to the world, but Bush* said "fuck that". "The Friends of Bush*" Corporations wanted that Gas Pipeline from the Caspian Fields so we had to buy off the Taliban's only friend: Pakistan.

Look how large are trade deficit is. Bush* is so busy paying off countries like Quatar (WTF!!) and is doing nothing to balance the flow of goods into this country. Tax Cuts, yea that's the ticket. We just need more tax cuts......Sorry, I'm rambling.

Is the Chinese language hard to learn?

[Lydia Leftcoast]

8. Chinese language and other matters

Basic spoken tourist Chinese isn't hard, as long as you don't get stymied by the basics of pronunciation in the first couple of weeks.

The written language is another matter: about 5,000 characters in common use. Even with the PRC "simplified" characters, that's quite a memory burden. Still, from experience, I know that after you've learned the first 1,000 or so, the rest come easily.

I was in China for five weeks in 1990, and development was extremely uneven: booming in the new economic zones, but at the same time, the new economic zones were attracting homeless day laborers from other areas and even ragged, thin elementary school age children who begged for coins by doing acrobatics on the street.

I haven't been back, but films and news reports suggest that the disparity is even greater now. Beijing and Shanghai seem completely different than the cities I saw in 1990, but I understand that there are more homeless day laborers than ever, since the heavy investment in the major cities has been balanced out by disinvestment in the rural areas. (No more free health care or schooling, for example.)

The situation is potentially explosive, because Deng Xiaoping ensured the loyalty of the 80% rural population by abolishing the agricultural communes and giving the peasants land. For a short time, they were doing better than they ever had in the entire history of China. If 80% of the population feels neglected, anything can happen.

[F.Gordon]

12. Thank you

I know some people who regularly travel to China, Taiwan, etc. and they paint a different picture. But, they go there to buy and I'm sure they "block out" the social conditions there. Money has a funny way of distorting your focus.

I'll have to admit I'm clueless regarding the rural-urban disparity going on in China. It sounds like I need to be more aware....

Thanks

[NewJeffCT]

16. eastern china vs the rest of it

The eastern part of China <from Hong Kong & Guangzhou (Canton)in the South to cities like Tianjin and Dalian in the North> is much wealthier than the rest of the country. They have an educated and growing middle & upper class that want to buy things like automobiles, homes in nice neighborhoods, big screen TVs and the like. However, they do have huge problems with graft/corruption, pollution and unemployment as they disband inefficient state companies... granted, graft & corruption in government officials in China is a tradition that dates back many centuries and is not just an East China problem.

Western China is dirt poor, however. However, western China has over twice the population as eastern China.

China is very much 'let the buyer beware', so if you're big screen TV falls apart the day after you buy it, you're up a creek. If you open a factory there and the brother of your Chinese foreman steals all your patents and opens his own factory and sells goods to Wal-Mart for half your price, you're also screwed.

[kodi]

9. as jobs flow overseas, more wealth flows to the american wealthy

all this is but a another way of transfering wealth in this country to those who already have most of the wealth.

most americans live from the sweat of their brows, the wealthy from investments.

as the availability of good paying jobs decrease, so do real wages. but investment money continues to rise with corporate profits, regardless of the job market if the jobs move off shore

[idlisambar]

11. Quality of life is the important thing

India and China are vastly more populous than the US. Given this the US can't expect to be the major economic power down the line. The important thing is not economic power anyway, it's quality of life. We should concentrate on building a better society and a better economy and not worry so much about our "power" relative to other nations.

[Wapsie B]

14. The jobs are moving out,

but what happens here? Hi-Tech was supposed to be the future but much of that's too easily outsourced to places like India. What happens when a large chunk of the middle class is no longer middle class? In the short term the wealthy get a bigger piece of the pie. But when consumers here can no longer afford new houses or cars for example, who will buy the shiny new products that companies sell? Where does the American worker go from here? So many questions.

[DrWeird]

15. Good for them.

Here's hoping the quality of life in the poorer parts of these countries improve.

[swinney]

17. North Carolina Job Losses are heartbreaking

Most are due to CHINA.

Furniture Industry decimated.
Hosiery Industry decimated.
Textile Industry decimated.

It hurts. Pillowtex went under and laid off 4,000. Most still seek employment.

Folks! Losing one's job is an emotional trauma. Especially for less educated with no profession.

I know. I have closed plants around this nation. The tears broke my heart. Man, wife, children in same plant all their working lives.
Expert at one thing. That job.

50 years in same plant.

FOLKS! BUSH AND HIS WEALTHY COHORTS MAY NOT FEEL PAIN BUT I FEEL PLENTY PLENTY . I HURT FOR THOSE PEOPLE.

JESUS CHRIST--TAKE CARE OF THE LEAST AMONGST THEE.

HOW CAN ONE CALL SELF A CHRISTIAN AND DO FOR MOST AMONGST THEE.

MAKES ME WANT TO VOMIT.
clarence swinney burlington nc