Aces High Bulletin Board
General Forums => The O' Club => Topic started by: FUNKED1 on February 12, 2005, 09:55:18 AM
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It's going down the same road as agriculture. In 50 years a manufacturing based economy will be just as backwards as an agriculture based economy is now.
Most people continue to believe that when manufacturing jobs decline, the country's manufacturing base is threatened and has to be protected. They have great difficulty in accepting that, for the first time in history, society and economy are no longer dominated by manual work, and a country can feed, house and clothe itself with only a small minority of its population engaged in such work. (http://economist.com/surveys/displayStory.cfm?Story_id=770861)
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Odd... I was just thinking about this subject this morning. <- not kidding
Capitalism without industry will be our downfall (the U.S.). You'd think the 90's would have made that abundantly clear. It seems, however, the buisness world is oblivious to that.
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Yup. Pretty soon employment will be obsolete.
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Originally posted by Mini D
Odd... I was just thinking about this subject this morning. <- not kidding
Capitalism without industry will be our downfall (the U.S.). You'd think the 90's would have made that abundantly clear. It seems, however, the buisness world is oblivious to that.
No true, we're transitioning from a manufacturing to a service based industry. The difference is, in the dot-com burst, all of the business that went under didn't provide a service that was popular enough to keep it alive.
I have a small business that moved 600k in inventory last year. I never saw, nor touched the inventory. I pushed papers, provided a service, and collected my fee. What exactly am I oblivious to?
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We can'l all be brokers Indy- someone has to make the product you sell...
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Originally posted by Airhead
We can'l all be brokers Indy- someone has to make the product you sell...
That's correct. Somebody in China will do it for pennies. Americans won't. Our standard of living has become too high to permit it. Therefore we switch to a service basis for the economy, and do our damndest to stay ahead of places like India, or we continue to produce goods that are priced too high to be competative. Evolve or die. We really don't have the option.
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Originally posted by indy007
That's correct. Somebody in China will do it for pennies. Americans won't. Our standard of living has become too high to permit it. Therefore we switch to a service basis for the economy, and do our damndest to stay ahead of places like India, or we continue to produce goods that are priced too high to be competative. Evolve or die. We really don't have the option.
Well we could start by the old fashioned tried and true method. Establishing a favorable balance of trade. Thereby making foriegn produced goods less economical like in the old days.
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That's correct. Somebody in China will do it for pennies.
The problem is you have to earn the pennies to pay the somebody in China.
At the moment the US isn't. It's using borrowed money to pay the somebody in China, to the tune of about 5% of GDP per year.
That's what your trade deficit is. It's more being imported than exported, and it's being paid for by little pieces of paper with IOU written on them (dollars)
There's nothing wrong with outsourcing manufacturing, provided you can replace it with some exporting industry to earn the money to buy the imports.
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Originally posted by Suave
Well we could start by the old fashioned tried and true method. Establishing a favorable balance of trade. Thereby making foriegn produced goods less economical like in the old days.
We won't establish a favorable balance of trade without lowering the production costs of our own goods. Unless, maybe, we imposed large tariffs on incoming goods to stop people from dumping into our market. What I'm saying is we need to build a more favorable balance of trade, not with goods that we can not produce for less, but instead with high demand services and foreign contracts for our skilled labor. It is a damn good incentive to improve our vocational training & post highschool education.
This kind of reminds me of around the time of "Mission Accomplished!" when rebuilding contracts were being handed to Halliburton & other companies. Other countries that didn't participate in the liberation wanted contracts too (Germany, France, etc). I say screw 'em (no offense Germans & French people, but money is money). Put that income into our own economy, do the jobs very well, and show off what American skilled labor can accomplish (when it's not being blown up).
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Originally posted by indy007
That's correct. Somebody in China will do it for pennies. Americans won't. Our standard of living has become too high to permit it. Therefore we switch to a service basis for the economy, and do our damndest to stay ahead of places like India, or we continue to produce goods that are priced too high to be competative. Evolve or die. We really don't have the option.
We're already losing the service sector. In addition to call center jobs, IT jobs, there are many others that can be moved to India. I read somewhere that Radiologist who read XRays are being shifted to India, too. Even the guy who takes your order at a drive through fast foiod restaurant (the silliness of that example should give you pause, because I'm not making it up. It demonstrates how powerful the incentive to save on labor costs is - when it's profitable to offshore a job who barely make more than minimum wage, what's left?)
So what's the next base for an economy after agriculture, manufacturing, and service jobs? We'd better get started. Because the next shift is going to happen even faster than the first two.
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Originally posted by indy007
Unless, maybe, we imposed large tariffs on incoming goods to stop people from dumping into our market.
Of course, this worked for a long time. We're a country of 250 million consumers, that's an enormous amount of leverage.
Put the tarrifs back on imported goods and you'll see the manufacturing jobs coming back to the states.
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Originally posted by Suave
Of course, this worked for a long time. We're a country of 250 million consumers, that's an enormous amount of leverage.
Put the tarrifs back on imported goods and you'll see the manufacturing jobs coming back to the states.
I think that is a great idea, but it is a political solution, and guess who controls both houses and the Presidency? They'll never go for it. Although Reagan wasn't afraid to slap tariffs on unfair competitors, so maybe I'd be surprised.
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"The new protectionism is driven as much by nostalgia and deep-seated emotion as by economic self-interest and political power. Yet it will achieve nothing, because “protecting” ageing industries does not work. That is the clear lesson of 70 years of farm subsidies. The old crops—corn (maize), wheat, cotton—into which America has pumped countless billions since the 1930s—have all done poorly, whereas unprotected and unsubsidised new crops—such as soya beans—have flourished. The lesson is clear: policies that pay old industries to hold on to redundant people can only do harm. Whatever money is being spent should instead go on subsidising older laid-off workers, and retraining and redeploying younger ones."
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Originally posted by indy007
I have a small business that moved 600k in inventory last year. I never saw, nor touched the inventory. I pushed papers, provided a service, and collected my fee. What exactly am I oblivious to?
You're oblivious to the fact that you are not needed.
Whomever controls the manufacturing is who is needed. You can pretend that you can go anywhere else all you want. Eventually you'll face the reality that the "anywhere else" is growing smaller and smaller. Then you'll face the reality that you weren't really needed at all. Then you'll face the reality that ignorance was bliss.
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Originally posted by Mini D
Odd... I was just thinking about this subject this morning. <- not kidding
Capitalism without industry will be our downfall (the U.S.). You'd think the 90's would have made that abundantly clear. It seems, however, the buisness world is oblivious to that.
I'm not sure I understand your post. Are you agreeing with me? The economic trends during 90's in the USA would most definitely not support an argument that manufacturing is a "special" sector that trumps service or knowledge based industries.
Everybody else missed the point of the article, don't be that guy.
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Originally posted by Nashwan
At the moment the US isn't. It's using borrowed money to pay the somebody in China, to the tune of about 5% of GDP per year.
You are confusing consumers and government.
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Originally posted by FUNKED1
I'm not sure I understand your post. Are you agreeing with me? The economic trends during 90's in the USA would most definitely not support an argument that manufacturing is a "special" sector that trumps service or knowledge based industries.
Everybody else missed the point of the article, don't be that guy.
Special sector? I never said that.
The 90's showed that buisness without industry is a recipe for dissaster. As a matter of fact, the late 20's demonstrated that too.
There needs to be a balance between buisness and industry. Shifting all manufacturing overseas greatly upsets that balance. I don't know of a single economicly successful nation that does it. Everyone has their industry as a backbone to virtually all buisness.
Once you lose the manufacturing capability, you will ultimately be endebted to those that are doing the manufacturing. Preaching even more of a shift of manufacturing is opening the floodgates for dissaster. The only stable option is maintaining manufacturing capabilities and sharing resources vs completely relying on someone else. Given the opportunity, every nation on earth will exploit the weakness of another nation.
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Switzerland, MiniD? Special case?
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Manufacturing is becoming more effecient, therefor presently employs less people, much the same happened to agriculture. And people should not interpret that as a portent of a falling economy, and try to remedy it. Agriculture produces and markets more now than it ever has, yet a relatively small fraction of the population are employed in the agriculture industry. We didn't miss the point.
But agriculture and manufacturing will both continue to be fields integral to human expansion. And both industries will continue to grow. Can you imagine what agriculture, manufacturing and civil engineering will be like when/if interplanetary colonization begins.
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Originally posted by oboe
Switzerland, MiniD? Special case?
Yes.
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MiniD the 90's saw productivity and real GDP per capita make huge gains, despite increasing market share for imported goods. There was no disaster caused by decreases in manufacturing employment as a percentage of the workforce.
Regardless of what sectors are most prominent, business cycles will still happen. We went through a mild one, in a historical context and in the context of what other large developed nations went through during the same period. The GDP and productivity gains were not lost, despite all of the politically motivated "recession" hype.
Suave summed it up pretty well. If I'm building a straw man of you I apologize.
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And I take it back, more people got it than I thought. I'm good at talking but not at listening.
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Originally posted by oboe
So what's the next base for an economy after agriculture, manufacturing, and service jobs? We'd better get started. Because the next shift is going to happen even faster than the first two.
PR0N
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Some day we'll create a race of AI to do this for us. Of course, they'll eventually turn on us and force us to fight for our lives. Then, in the event we win, our world will be so destroyed that we'll long for the day we can manufacture the goods we have now.
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Originally posted by oboe
I think that is a great idea, but it is a political solution, and guess who controls both houses and the Presidency? They'll never go for it. Although Reagan wasn't afraid to slap tariffs on unfair competitors, so maybe I'd be surprised.
OK slap the tariffs back on steel and see who gets hurt by that. If we as a nation do that now you can kiss the exports to Europe goodbye that we do as a result of the weak Dollar against the Euro.
Its all part of the cycle and if you don't think the economies all over the world aren't tied together tight then take a look at currency values sometime.
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You are confusing consumers and government.
No, I'm not talking about government at all.
US consumers are buying from abroad goods worth more than America sells abroad.
Because America isn't sending enough goods abroad to pay for the goods it's importing, it has to send cash instead. All cash is is an iou.
The problem is, America simply isn't producing enough goods and services to support it's current lifestyle, so is buying more from abroad, and sending IOUs to pay for them.
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Originally posted by Reschke
OK slap the tariffs back on steel and see who gets hurt by that. If we as a nation do that now you can kiss the exports to Europe goodbye that we do as a result of the weak Dollar against the Euro.
Its all part of the cycle and if you don't think the economies all over the world aren't tied together tight then take a look at currency values sometime.
Why steel? I was thinking more of manufactured consumer goods.
Is there no way out for the US middle class? Will the change in equilibrium set off by NAFTA and expanded trade with China eventually result in the dragging down of the US middle class to standards of living comparable to the working classes of Taiwan, China, Mexico, and the Phillippines?
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Originally posted by FUNKED1
MiniD the 90's saw productivity and real GDP per capita make huge gains, despite increasing market share for imported goods. There was no disaster caused by decreases in manufacturing employment as a percentage of the workforce.
Bull****. Every time it happens there is a reset. A giant slap in the face at which point some people realize that you need both. Leaning too far towards buisness has ALWAYS caused the recessions... not leaning too far towards manufacturing.
Hell... 99% of buisness is sitting back and trying to make money off of someone else's manufacturing. It really is that simple. The more people that do it, the less there is to actually make money off. So, we end up finding we can make more money if we move manufacturing entirely oversees and have someone else do all the work. We become an entirely service based society and end up fat dumb and happy. Then China bans exports to the U.S. and... um... oh yeah, we just start up again?
The U.S.S.R.'s ignorance of world economy was their own undoing. Too much military spending, too little non-military exports. No real balance with anything they did. The U.S. will fall into the trap of thinking that you can simply sit back and let the rest of the world do the work and make all the money off of it. At some point, the workers aren't going to apreciate that very much.
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We have a gate and decorative fence shop. Basically we heat and beat steel into submission. we also fabricate from any metallic medium and build wooden fences as well, from the mundane to the sublime. That makes me a manufacturer. There is no shortage of demand for our product in this market. We have orders taking us through May 2005. Slap tariffs on steel or not, no matter we only use domestic steel. foreign steel generally is very inconsistent in it's treating and carbon composition.
Foreign aluminum is even worse at times almost unweldable. My welders curse me up and down the few times I've tried to implement it. The truth is if I had to weld that crap day in day out I would look for work elsewhere.
For the slight difference in price between the two I'll stick with domestic. The quality of American made products is unsurpassed.
I still refuse to purchase Chinese castings for our finials and collars. My business still goes to the local foundry even though there I pay three times as much for the product. The difference is notable when you hold the products side by side. The difference in the cost is passed on to the consumer. When I make a sales call I take samples with me and I allow the customer to select which finial they would prefer. When they ask me to "sharpen my pencil" a bit I show them what I must do to bring the price in line with my colleagues. After a pitch on supporting the local economy and the blaring difference in quality it is usually an easy sell.
There is one notable exception, nails. For our wooden fences we use nails manufactured in the United Arab Emirates by an outfit called TIMCO. The quality of their fasteners is unbelievable but they are not cheaper than domestic, they are about on par.
The price of steel and other construction related materials is currently being driven by Chinese comsumption. Many of us see China as an exporter but what many fail to see is that the Chinese economy grew on the order of 500% last year. Chinese demand far outstrips Chinese production capabilities. With steel in particular the impact is world wide. The price of steel is rising steadily and will probably do so for many years to come. Don't hold a wake for Americam manufacturing jobs just yet.
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world steel production::
china leads with 130 million tons/year
US & japan tie for 2nd-3rd with about 110 tons
next place is about 50-60 tons
it goes down from there.
i'm always amazed when people say "the US is a service economy", do you think nothing is made in the US?
in the intrest of accuarcy, the new figures are::
page 3
The major steel-producing countries,
2002 and 2003
million metric tonnes crude steel production
Country 2003 2002
Rank Tonnage Rank Tonnage
China 1 220.1 1 182.2
Japan 2 110.5 2 107.7
United States 3 90.4 3 91.6
Russia 4 62.7 4 59.8
South Korea 5 46.3 5 45.4
FR Germany 6 44.8 6 45.0
Ukraine 7 36.9 7 34.1
India 8 31.8 9 28.8
Brazil 9 31.1 8 29.6
Italy 10 26.7 10 26.1
France 11 19.8 11 20.3
Taiwan, China 12 18.8 12 18.2
Turkey 13 18.3 13 16.5
Spain 14 16.5 14 16.4
Canada 15 15.9 15 16.0
Mexico 16 15.2 16 14.0
United Kingdom 17 13.3 17 11.7
Belgium 18 11.1 18 11.3
South Africa 19 9.5 19 9.1
Poland 20 9.1 20 8.4
Iran 21 7.9 22 7.3
Australia 22 7.5 21 7.5
Czech Republic 23 6.8 23 6.5
Netherlands 24 6.6 25 6.1
Austria 25 6.3 24 6.2
Sweden 26 5.7 26 5.8
Romania 27 5.7 27 5.5
Argentina 28 5.0 30 4.4
Kazakhstan 29 4.9 28 4.8
Malaysia (e) 30 4.8 29 4.7
Finland 31 4.8 34 4.0
Slovakia 32 4.6 32 4.3
Egypt 33 4.4 31 4.3
Saudi Arabia 34 3.9 35 3.6
Venezuela 35 3.9 33 4.2
Indonesia (e) 36 2.8 38 2.5
Luxembourg 37 2.7 36 2.7
Thailand (e) 38 2.6 37 2.5
Hungary 39 2.0 39 2.1
Others 23.1 22.6
World 964.8 903.6
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Originally posted by oboe
Switzerland, MiniD? Special case?
Originally posted by MiniD
Yes
Special case? Not at all.
By % of GDP
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Switzerland:
agriculture: 1.5%
industry: 34%
services: 64.5%
USA:
agriculture: 1.4%
industry: 26.2%
services: 72.5%
By % of labor force
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Switzerland:
agriculture 4.6%
industry 26.3%
services 69.1%
USA:
agriculture 0.7%
industry 22.7%
services 76.6%
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"So what's the next base for an economy after agriculture, manufacturing, and service jobs?"
SPACE! :D
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I mentioned steel simply because it effects a vast majority of people here in the Birmingham, AL area such as the company I work for. After searching for 3 years for a steel mill to actually quote us on making pipe the requirement was to purchase 4 mill runs (roughly 4 million feet of pipe) of the pipe in order for them to change their tooling over to our tolerances. Plus we would have to eat the tooling costs on those 4 runs because they could not be consecutive. And we wonder why we can't compete on the world stage for steel prices.....I could care less about the steel from over in Asia but the European markets need the US now more than ever with the Euro being so much stronger than the Dollar. If we choose not to change the long term goal in US manufacturing we run the risk of falling into the same problems that faced us financially after WWI.
Yes I agree with Storch that chinese steel or korean steel is a super low quality but the steel that you see rolling out of Switzerland, Germany and Sweden is easily as good as any made here. Hell I have steel pipes that have lasted over 100,000 cubic yards (with highly abrasive concrete) being pumped through it at over 1200PSI and its all made in Germany and Switzerland.
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One manufacturing job creates at least 3 other jobs. Sure we can build more with less, and so be it. But if we don't create a manufacturing base we become strictly importers.
The coolest thing about my industry is that it is pretty dang difficult to outsource it.
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Didn't you guys hear that the Bush administration has classified McDonald's as manufacturing? We've got plenty of manufacturing jobs now.
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Originally posted by midnight Target
One manufacturing job creates at least 3 other jobs. Sure we can build more with less, and so be it. But if we don't create a manufacturing base we become strictly importers.
The coolest thing about my industry is that it is pretty dang difficult to outsource it.
What is your industry, pray tell.
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Originally posted by Reschke
I mentioned steel simply because it effects a vast majority of people here in the Birmingham, AL area such as the company I work for. After searching for 3 years for a steel mill to actually quote us on making pipe the requirement was to purchase 4 mill runs (roughly 4 million feet of pipe) of the pipe in order for them to change their tooling over to our tolerances. Plus we would have to eat the tooling costs on those 4 runs because they could not be consecutive. And we wonder why we can't compete on the world stage for steel prices.....I could care less about the steel from over in Asia but the European markets need the US now more than ever with the Euro being so much stronger than the Dollar. If we choose not to change the long term goal in US manufacturing we run the risk of falling into the same problems that faced us financially after WWI.
Yes I agree with Storch that chinese steel or korean steel is a super low quality but the steel that you see rolling out of Switzerland, Germany and Sweden is easily as good as any made here. Hell I have steel pipes that have lasted over 100,000 cubic yards (with highly abrasive concrete) being pumped through it at over 1200PSI and its all made in Germany and Switzerland.
I should have specified Asian steel. euro steel is every bit the equal of US produced steel and often times better. The prices make them uncompetetive for my consumption.
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MT is in the RV business.
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Originally posted by indy007
I have a small business that moved 600k in inventory last year. I never saw, nor touched the inventory. I pushed papers, provided a service, and collected my fee. What exactly am I oblivious to?
The first thing that comes to my mind is that a guy in India with an internet connection can do your job...for less money.
Anyway, the plant I have worked at for the last twenty years is closing as have/are several others in the county that I live in. The jobs are going to Mexico, phillipines, and China.
One of the parts we manufactured were parts for the Hellfire missle, so I have to assume other military stuff is also going to other countries to be manufactured. I wonder if this will come back to bite us in the future :confused:
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Can anyone guess what the largest US export by volume is?
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Originally posted by Mickey1992
Can anyone guess what the largest US export by volume is?
CO2?
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And trade deficits do not matter. All those green backs sitting in vaults in China and Saudi Arabia and Japan and Canada do not matter at all.
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Originally posted by Mickey1992
Can anyone guess what the largest US export by volume is?
Recycled paper pulp.
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Originally posted by Pongo
And trade deficits do not matter. All those green backs sitting in vaults in China and Saudi Arabia and Japan and Canada do not matter at all.
because they hold so much "worthless" paper they will do everything they can to ensure the dollar does not lose value.
if you owe the bank $100,000 they own you.
if you owe the bank $100 million , you own the bank.
abby normal
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Originally posted by Lye-El
The first thing that comes to my mind is that a guy in India with an internet connection can do your job...for less money.
Anyway, the plant I have worked at for the last twenty years is closing as have/are several others in the county that I live in. The jobs are going to Mexico, phillipines, and China.
One of the parts we manufactured were parts for the Hellfire missle, so I have to assume other military stuff is also going to other countries to be manufactured. I wonder if this will come back to bite us in the future :confused:
Eds is outsourcing a lot of there Michigan jobs to Malaysia is not just the call center jobs that are going. I know they are outsourcing planners as well.
You know the ones who order the 600k of merchandise that is then drop shipped to places like gm..... that is not touched by that person. who would then just collect her fee......
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Originally posted by john9001 because they hold so much "worthless" paper they will do everything they can to ensure the dollar does not lose value.
They aren't, that's why the USD lost about 30% of it's value over the last 6 years.
if you owe the bank $100,000 they own you.
if you owe the bank $100 million , you own the bank.
1. It depends on how much the bank is worth. If the bank is worth tens or hundreds of billions of dollars you can bet they still own you.
2. Nations states aren't banks. It's still a simple matter of the US relying on them for cheap goods. They don't rely on the US for pieces of paper with dead presidents on them.
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you miss the point entirely.
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Originally posted by john9001
you miss the point entirely.
They don't lose wealth, the wealth was already exchanged for the USDs.
All that they would lose was the ability to pretend that USDs have inherent value.
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Originally posted by storch
What is your industry, pray tell.
We build RV's. Still pretty hard to economically ship one overseas without taking a bath on the transport costs.
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Isn't it about time for an amphibious, nautical RV ?
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Originally posted by Suave
Isn't it about time for an amphibious, nautical RV ?
(http://www.terrawind.com/IMG_1761aweb.jpg)
Terrawind RVs (http://www.terrawind.com/terrawind.htm)
They're about 1 mil each on average.
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Originally posted by Thrawn
They don't lose wealth, the wealth was already exchanged for the USDs.
All that they would lose was the ability to pretend that USDs have inherent value.
thrawn,has your envy of USA warped your thinking?
are you saying the chinese are so stupid they will exchange their valuable products for worthless USD's? who is the fool, you or the chinese?
but , all is not lost , the chinese can exchange the "worthless" USD for worthless boeing airplanes or worthless US steel or worthless govt bonds or even better, they could exchange the worthless USD's for the very valuable CANADIAN DOLLAR, last i heard canadian people still were acepting worthless USD's
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Depending on Saudi, Chinese and Japanese self interest to prop up your economy is an interesting decision.
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Originally posted by john9001
thrawn,has your envy of USA warped your thinking?
:rolleyes:
are you saying the chinese are so stupid they will exchange their valuable products for worthless USD's? who is the fool, you or the chinese?
Nah, they are doing it for very smart reasons. Why do you think China wants the US to be literally indebted to them? Why do you think they want the US to rely on them for manufactured goods?
Quite simply to gain control and power over the US.
but , all is not lost , the chinese can exchange the "worthless" USD for worthless boeing airplanes or worthless US steel or worthless govt bonds or even better,
But that's the point, for the most part they don't, hence the massive trade deficit the US has with China.
they could exchange the worthless USD's for the very valuable CANADIAN DOLLAR, last i heard canadian people still were acepting worthless USD's
Thanks but we got $65 billion in USDs from you guys last year alone that we don't know what to do with.
http://www.census.gov/foreign-trade/balance/c1220.html
And something you should ask yourself is what happens when those USDs from China or whereever goes into circulation. It's a tough nut to crack, but somehow the US needs to find a way to buy back decade's worth of trade deficit or hope the system lasts into perpetuaty.
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I've been in that RV-Yacht, and driving that thing into anything but a dead calm lake would scare the crap outta me.
They were asking $850k at the show.
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I want one of these.
(http://dsc.discovery.com/fansites/monstergarage/episode/gallery/8_7_hzoom.jpg)
(http://www.tms.org/pubs/journals/JOM/0310/Byko/fig3.gif)
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I would take Jimmy Buffet's amphibious motorhome.
(http://www.gtechno.com/cas/albatros.jpg)