America DEBT FREE in 2 years

[drsteph]

Quote from thriftybob:

Remember how we USED to make things ike radios, TV's, washers, dryers, refrigerators, toasters, waffle irons, pots and pans, furniture, clothes, etc?

Well pretty soon I think we will add Autos to the list of things we USED to make. Already most of the parts at Autozone are made in China. It won't be too long before competition forces the automakers to either import all the cars and trucks or go out of business. As volumes drop, cost per unit rises and the effects of fixed costs like healthcare and retiree pensions hurt that much more.

I expect the exodus to continue until we make almost nothing, and then, when the rest of the world gets tired of accumulating our paper IOU's, the dollar will crash, and we just won't be ABLE to AFFORD to buy the imports, and lacking any domestic production ability, we will be forced to do without.

You know, I wrestle with this too.

There's little doubt in my mind that the leaders of the G-7 have come to the conclusion that a service based economy is superior to a manufacturing based economy - it pollutes less, requires less infrastructure, and is less subject to cyclical vagaraties. Furthermore, it removes the power of those pesky labor unions and eliminates clean-up costs. Furthermore, simple legislation and change management can change the center of production from emerging economy to emerging economy based upon the political vagaries of the moment.

So, the only real concern is a bonafide supply shock that is brought around through either natural disaster (hurricane, bird flu, etc) or political disaster (trade war, war, etc...)

As long as it works, it is actually pretty intelligent. And I can say that the air here in the states is a lot cleaner than I remember when I was a kid. Less soot on the ground, etc... But I worry a lot about that supply shock issue. Lean inventories, etc... don't leave a lot of room for error. A lot of people might be be real surprised at the grocery store when the 7 day inventory runs out... and there just isn't any more. It only takes a hurricane to cause a disruption like that, and time and time again reponsible governmental agencies have simply come up so short its embarrasing. Very worrisome, in my opinion - but cash will be the least of the worries.

 

[gnome]

Quote from drsteph:

"... There's little doubt in my mind that the leaders of the G-7 have come to the conclusion that a service based economy is superior to a manufacturing based economy..."

History supports the notion that countries which "manufacture goods, sell them to the world at at a profit and build financial reserves"... become the world's financial powers. As did the USA after WWII, and like China/India today (Let's never forget... we HOSED ourselves when we GAVE AWAY our manufacturing base and well-paying, middle class jobs to them so that we could continue to buy cheap goods at Wal-Mart).... when the history of this time is written, this will be an even bigger blunder than IBM's conclusion that "the personal computer will never amount to more than a novelty", giving Bill Gates and Microsoft the rights to the operating system for a mere song.

For the G-7 to conclude "a service economy is superior..." officially classifies them as DUMBASSES and DILLHOLES!!

 

[trefoil]

Forgive me, but allow me to cite some actual, fact-based <a href="http://www.pwc.com/uk/eng/ins-sol/publ/ukoutlook/pwc_ukeo-mar07.pdf" target=";">research.</a>
The cited is a study from Price Waterhouse about the UK economy that throws in, as a bonus, I suppose, worldwide rankings of cities by size of their GDP's.
Turn to page 23, and you see that, in 2005, NYC was number 2 behind Tokyo, and is projected, according to these folks, to still be number two.
LA is number three and will continue to rejoice in that position in 2020.
Chicago does drop, from fourth to fifth.
Philly, OTOH, goes from ninth to eighth, behind Mexico City, which goes from eighth to seventh.
These two cities combine to drop Osaka from seventh to ninth.
China? Well, Shanghai does manage to go from 32 to 16. Beijing, meantime, rises from 44 to 29. Hong Kong, though, stays stuck at 14.
Note that Hong Kong is the highest ranking Chinese city. It's behind Boston, and just barely manages to edge out Dallas/Fort Worth.
Sorry to introduce a bit of reality into this discussion. <b>rcanfiel</b> tried, so I figured I should give him a little backup.

 

[rcanfiel]

Quote from thriftybob:

Remember how we USED to make things ike radios, TV's, washers, dryers, refrigerators, toasters, waffle irons, pots and pans, furniture, clothes, etc?

Well pretty soon I think we will add Autos to the list of things we USED to make. Already most of the parts at Autozone are made in China. It won't be too long before competition forces the automakers to either import all the cars and trucks or go out of business. As volumes drop, cost per unit rises and the effects of fixed costs like healthcare and retiree pensions hurt that much more.

I expect the exodus to continue until we make almost nothing, and then, when the rest of the world gets tired of accumulating our paper IOU's, the dollar will crash, and we just won't be ABLE to AFFORD to buy the imports, and lacking any domestic production ability, we will be forced to do without.

Manufacturing is not that simple. More American jobs have been lost to automation (robotics, complex machinery) than due to "offshoring." Manufacturing is a deadend for all countries that think it will bring home the jobs bacon. And just take a look at all the wonderful things happening to China's rivers and ecology from all this "wealth."

 

[rcanfiel]

Quote from gnome:

History supports the notion that countries which "manufacture goods, sell them to the world at at a profit and build financial reserves"... become the world's financial powers.

Yes, that was HISTORY. Manufacturing is not the way any country will become a power. China is manufacturing a lot, and still is essentially a third world power once you get away from ChongChing, HK, Shanghai, Beijing, etc. They struggle with what to do with hundreds of millions of peasants and poor.

 

[version77]

Quote from rcanfiel:

They struggle with what to do with hundreds of millions of peasants and poor.

China has more poor people than all of the people combined in the US.

Imagine when they get up to 2 Billion...:eek:

I hope they have a lot of land to grow rice...

 

[watchdaride]

Quote from rcanfiel:

America manufactures twice the dollar value of the second most country, China.

Do your homework. Cars? Jets? Software? Hollywood movies? Agricultural goods? etc etc.?

but how much of this is exported? isnt that the important part to have higher exports than imports . We cant compete in cars agriculture because of the cost\quality . And most of the software support and development is now exported to asia. I always wondered how we benefit from freetrade ? We cant compete with 3rd world labour cost .

 

[rcanfiel]

Quote from watchdaride:

but how much of this is exported? isnt that the important part to have higher exports than imports . We cant compete in cars agriculture because of the cost\quality . And most of the software support and development is now exported to asia. I always wondered how we benefit from freetrade ? We cant compete with 3rd world labour cost .

lower cost goods cause people to be able to buy more. This helps all, including the poor. Countries like China that have chosen to be the world's manufacturer, are having horrendous enivronmental problems with the things they are doing.

It isn't just about manufacturing. Keep in mind, we are near full employment (4.6% or so). The Rocky Mountain states can't find enough workers (unemployment at record lows). Many agricultural concerns have produce rotting in the fields for lack of workers.

Manufacturing pays little better than Walmart jobs, frankly.

Our problem is DEBT.

 

[Cache Landing]

Quote from watchdaride:

but how much of this is exported? isnt that the important part to have higher exports than imports . We cant compete in cars agriculture because of the cost\quality . And most of the software support and development is now exported to asia. I always wondered how we benefit from freetrade ? We cant compete with 3rd world labour cost .

I'm not trying to be rude in saying this, but you should really study basic econ a bit. Free trade is the reason we are as affluent as we are. And to say that we aren't competitive in agriculture is ridiculous. We have the advantage of having the largest GDP that is mostly consumed internally. We don't have to worry about other countries buying our stuff. Greedy americans will always be more than happy to buy it.

 

[Cache Landing]

Quote from rcanfiel:



It isn't just about manufacturing. Keep in mind, we are near full employment (4.6% or so). The Rocky Mountain states can't find enough workers (unemployment at record lows). Many agricultural concerns have produce rotting in the fields for lack of workers.

Tell me about it. I live in a Rocky Moutain State. We can't find employees to save our lives here. My city is at about 2% unemployment.