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World power swings back to America
- Thread starter bone
- Start date
Quote from Eight:
America could be lean and mean five years from now.. We are headed for energy independence, if the Fed Level Public Sector could inflate themselves out of the debt overhead they could get going again investing in things that grow America [Education, R&D] instead of the current regimes moronic stuff [Teacher's Unions, Inner City Reservations, NASA cutbacks, Washington DC Attorneys leading the Nation in Wealth, etc. ad infinitum ad nauseum].
I'm reading predictions with regard to inflation and, while we are not due for any at all in the context of the Long Cycle, if we had a couple of years of 20% followed by a couple of years of 100% the Federal Public Sector debt load would be small and we would be back to business as usual..
The Public Sector at other levels cannot inflate their way so they are cutting back on all the stuff they promised everybody, ie Medicaid. Retirement contracts will be renegotiated along the way as well... Those Union retirement contracts get put on the table in negotiations all the time. Unions will reduce retirees take in order to get a wage increase for current workers because the current workers offer them leverage while retirees are just on the sidelines..
We really are headed for some massive upheavel but when the smoke clears the scenario could be a lot different and a lot more promising for the next few generations...
"and we would be back to business as usual.."
that is a hell of a statement without offering an iota of proof. to ignore the damage caused by inflation of this magnitude is the height of folly.
but then again this is ET where nonsense is prototypical of nearly every thread except hardware and software.
by the way the public sector other than the federal cuts back till the unions scream loud enough for the Federal government to bail them out i.e. argentina and their provinces.
Quote from Tsing Tao:
So much wrong with this article that I honestly have no idea where to start.
For instance, the assumption that - just because our population is increasing we can grow our way out of debt. The highest increase in population comes from Hispanic households - also, where the highest amount of government assistance is being given. Said differently, the people who actually COULD grow us out of debt because of our contributions are not the ones that are growing.
Just add consumption tax replacing income tax and, Voila!! Mexicans [and drug dealers, pimps, tax evaders, vacationers, etc] are brought into the tax revenue arena...
Quote from zdreg:
"and we would be back to business as usual.."
that is a hell of a statement without offering an iota of proof. to ignore the damage caused by inflation of this magnitude is the height of folly.
but then again this is ET where nonsense is prototypical of nearly every thread except hardware and software.
by the way the public sector other than the federal cuts back till the unions scream loud enough for the Federal government to bail them out i.e. argentina and their provinces.
Proof? It's conjecture... ET is a brainstorming thingy. You are looking for debate with scientific underpinnings? Go to a University maybe, but they are very closed little societies and won't allow open debate on most subjects...
Maybe the Unions don't have to be catered to. If we elect people with a mandate to crush the Public Sector Unions they can kick and scream their way into the history books...
I'm thinking that if the US endured the pain of a few years of inflation and wound up with 15 cents for their dollars we would be lean and mean... if all that pain was endured with a backdrop of Unions demanding more money while grandma starved, that the US might take on a mindset of wanting to outlaw Public Sector collective bargaining...
Quote from Eight:
Proof? It's conjecture... ET is a brainstorming thingy. You are looking for debate with scientific underpinnings? Go to a University maybe, but they are very closed little societies and won't allow open debate on most subjects...
Maybe the Unions don't have to be catered to. If we elect people with a mandate to crush the Public Sector Unions they can kick and scream their way into the history books...
I'm thinking that if the US endured the pain of a few years of inflation and wound up with 15 cents for their dollars we would be lean and mean... if all that pain was endured with a backdrop of Unions demanding more money while grandma starved, that the US might take on a mindset of wanting to outlaw Public Sector collective bargaining...
with all that has been written on the subject the best "conjecture"
u can come up with is to impoverish the middle class?
maybe a few economic courses at the university of chicago or some other conservative economics department would give you a foundation in economics. it,then, would allow you to make reasoned proposals.
Quote from bone:
World power swings back to America
The Telegraph, Monday, October 24, 2011
The making of computers, electrical equipment, machinery, autos and other goods may shift back to the US from China.
By Ambrose Evans-Pritchard, International Business Editor
The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.
Assumptions that the Great Republic must inevitably spiral into economic and strategic decline - so like the chatter of the late 1980s, when Japan was in vogue - will seem wildly off the mark by then.
Telegraph readers already know about the "shale gas revolution" that has turned America into the worldâs number one producer of natural gas, ahead of Russia.
Less known is that the technology of hydraulic fracturing - breaking rocks with jets of water - will also bring a quantum leap in shale oil supply, mostly from the Bakken fields in North Dakota, Eagle Ford in Texas, and other reserves across the Mid-West.
"The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d)," said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.
Total US shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009.
The US already meets 72pc of its own oil needs, up from around 50pc a decade ago.
"The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players," said Mr Blanch.
Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion.
"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.
Fed actions confronted Beijing with a Morton's Fork of ugly choices: revalue the yuan, or hang onto the mercantilist dollar peg and import a US monetary policy that is far too loose for a red-hot economy at the top of the cycle. Either choice erodes China's wage advantage. The Communist Party chose inflation.
Foreign exchange effects are subtle. They take a long to time play out as old plant slowly runs down, and fresh investment goes elsewhere. Yet you can see the damage to Europe from an over-strong euro in foreign direct investment (FDI) data.
Flows into the EU collapsed by 63p from 2007 to 2010 (UNCTAD data), and fell by 77pc in Italy. Flows into the US rose by 5pc.
Volkswagen is investing $4bn in America, led by its Chattanooga Passat plant. Korea's Samsung has begun a $20bn US investment blitz. Meanwhile, Intel, GM, and Caterpillar and other US firms are opting to stay at home rather than invest abroad.
Europe has only itself to blame for the current âhollowing outâ of its industrial base. It craved its own reserve currency, without understanding how costly this âexorbitant burdenâ might prove to be.
China and the rising reserve powers have rotated a large chunk of their $10 trillion stash into EMU bonds to reduce their dollar weighting. The result is a euro too strong for half of EMU.
The European Central Bank has since made matters worse (for Italy, Spain, Portugal, and France) by keeping rates above those of the US, UK, and Japan. That has been a deliberate policy choice. It let real M1 deposits in Italy contract at a 7pc annual rate over the summer. May it live with the consequences.
The trade-weighted dollar has been sliding for a decade, falling 37pc since 2001. This roughly replicates the post-Plaza slide in the late 1980s, which was followed - with a lag - by 3pc of GDP shrinkage in the current account deficit. The US had a surplus by 1991.
Charles Dumas and Diana Choyleva from Lombard Street Research argue that this may happen again in their new book "The American Phoenix".
The switch in advantage to the US is relative. It does not imply a healthy US recovery. The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.
Yet America retains a pack of trump cards, and not just in sixteen of the worldâs top twenty universities.
It is almost the only economic power with a fertility rate above 2.0 - and therefore the ability to outgrow debt - in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.
Europe's EMU soap opera has shown why it matters that America is a genuine nation, forged by shared language and the ancestral chords of memory over two centuries, with institutions that ultimately work and a real central bank able to back-stop the system.
The 21st Century may be American after all, just like the last.
the burden of compounding debt is destroying the US. there is no way out except to repudiate the debt and to fire 25%+ of the government work force. population growth among an ill educated populace only increases the debt.
Quote from Scataphagos:
They did it in Rome, Germany, Zimbabwe, Turkey, Argentina, Brazil (several times), et al. What makes you think American politicians are any smarter or less greedy/chicken-shit than others?
what makes anybody think that the american people are smarter than other people? peronism is alive and well. the many idiots in america are waiting for the reincarnation of a copycat juan peron, peron was a charismatic leader who fooled the argentian people into believing that the government would take care of them. 100%+ inflation and hunger was the result except for the favored groups. obama is just the first manifestation.
Quote from Hansel H:
Public Sector = economically irrelevant people servicing other economically irrelevant people at staggering cost to the taxpaying public.
Not entirely true, of course, but largely true.
if you include a factor for useless government workers the true unemployment rate of 16%goes to 20%+.
in new york it cost $15000 to educate a student per year. if you have two children in school that is $30,000. how many families pay $30000
in taxes to cover this cost?
in utah the cost is $6000 to 8000. is the output in ny any better?
International deals/agreements should be transparent and on win-win proposition.
Hope America reviews and rectifies their agreements with rest of the world.
Hope America reviews and rectifies their agreements with rest of the world.