Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Mon Jul 28, 2008 10:03 pm Post subject: Re: We have become the bitch of China.
Byron100 wrote:
Reading some of the posts on this thread makes me wish for a total dollar collapse here in the US, just so we can no longer import anything from Asia.
Heck, we'd be able to go for 10 years or more here in the US just on what we have already...clothes, TVs, cars, etc, etc.
Bring on the trade embargoes!
China owns a significant portion of the US debt.
Here's a quote from an MSNBC article last May.
Quote:
So just who are these lenders? As of last June (the latest complete breakdown available), the biggest holder of Treasury debt was the U.S. government itself, with about 52 percent of the total $8.5 trillion in paper that's out there. Most of the government’s holdings are massive savings accounts for programs like Social Security and Medicare. Just as you may prefer to keep your Individual Retirement Account in the safe Treasury bonds, the folks who manage the Social Security Trust Fund are looking for a secure investment, too.
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That’s leaves a little over $4 trillion in public hands. The biggest chunk (about 25 percent of the $8.5 trillion total) is held by foreign governments. Japan tops the list (with $644 billion), followed by China ($350 billion), United Kingdom ($239 billion) and oil exporting countries ($100 billion).
Here's another from the NY Times - Herald Tribune in 2006
Quote:
America's indebtedness to China, as a result, is staggeringly high, although the Bush administration - which needs foreign loans to help finance the budget deficit - seems unfazed. But there is reason for pause. The Wall Street Journal reported this week that China's holdings of foreign currency and securities would soon top $1 trillion, a fivefold increase since 2000. Roughly 70 percent of that is believed to be in dollars or dollar-based assets.
Of course, $1 trillion does not confer significantly more clout than, say, $990 billion. But the size and growth of China's holdings mean increasing vulnerability for the United States.
For several years, China's loans have helped to keep prices and interest rates low in the United States, and to finance big tax cuts. If the lending began to dry up - because Chinese officials decided to diversify into other currencies or to spend more at home - prices, interest rates and taxes in the United States would very likely rise.
Joined: Aug 15, 2005 Posts: 269 Location: Hicktown OK
Posted: Sat Aug 02, 2008 5:35 pm Post subject: Re: We have become the bitch of China.
Quote:
To the tune of "What a Friend We Have in Jesus"
We've become the bitch of China
The neo-cons will have a cow
They thought it just meant giant profits
And not The Thoughts of Chairman Mao
Back in the 90s when they laid us all off,
They thought they'd never see the day
There was no need to invade us,
'Cause Wal-mart sucked it all away.
We've become the bitch of China
Each day, they make another deal
For oil and natural resources
They need for economic weal.
The craft and industry we once claimed as ours,
A nod, a wink and they were gone.
Time for us to all learn Mandarin
The king in turn becomes the pawn.
_________________
*applause* _________________ Human history becomes more and more a race between education and catastrophe.-H.G. Wells
Posted: Sat Aug 02, 2008 10:36 pm Post subject: Re: We have become the bitch of China.
Nickel wrote:
Canuk wrote:
If a container is dimensionally 8 x 8'6" x 20 (interior standard size) this would equate roughly for example to $62.50 per BBQ and more for household appliances in shipping costs. Since the savings in labour to move the production overseas was less than $50.00 the savings is lost When a BBQ sells wholesale for approx $150.00 this is a significant percentage. I'm sure that small items lie Ipod's or CPU's will be OK but the larger items will no longer be cost effective to build in China or SE Asia and ship overseas.
Yeah, some, that's what I'm saying. It's not an absolute; it depends on what you're making and shipping. But the sad fact is, it's much better to be the manufacturer of iPods than BBQs, and small, high-priced technological devices remain the ones with the highest labour costs and the lowest transportation costs per unit. So again, I'm not convinced that that even $200 a barrel oil is going to turn us back into Pleasantville, 1955 again. When I start seeing TV sets manufactured in North America again...
Ipods for example are a highly automated product where the direct labour content may be as little as 1 hour per unit. The machinery that produces the Ipod (chip inserters, odd form placement machinery, wave soldering, etc..) are worth far more than the direct labour and likely not as yet produced in China.
Electronics may come back due to the low direct labour input, provided China does not start to manufacture the required machinery since the labour input as a portion of price may offset the cost of shipping the machinery (and staff to setup) and the raw materials to China. However they are rapidly gaining the expertise to make their own machinery and will not need our expertise which is when they will truly be able to compete.
Keep in mind most products are not sold by what it costs so the labour to produce is truly a small fraction (10-20%) of the cost you pay. Any time you feel incensed by price blame the marketing and retail that is where most of the product cost is.
Joined: Jun 26, 2007 Posts: 1620 Location: The Canada of America
Posted: Sun Aug 03, 2008 7:17 am Post subject: Re: We have become the bitch of China.
Canuk wrote:
Ipods for example are a highly automated product where the direct labour content may be as little as 1 hour per unit. The machinery that produces the Ipod (chip inserters, odd form placement machinery, wave soldering, etc..) are worth far more than the direct labour and likely not as yet produced in China.
Ignoring for the moment that that's just a single instance of a small, expensive product... if it's made in Japan, or Taiwan, or Singapore, does that really constitute an appreciable difference where the geographic particulars of your point are concerned?
Canuk wrote:
However they are rapidly gaining the expertise to make their own machinery and will not need our expertise which is when they will truly be able to compete.
Rapidly gaining? I think you're a couple of decades behind the times. When was the last time you heard of a TV, or VCR, or DVD player, or stereo system built on this continent? We would almost certainly have to hire people from overseas to re-establish the knowledge base and particular infrastructure to compete in these fields now. We've lost so much.
Canuk wrote:
Keep in mind most products are not sold by what it costs so the labour to produce is truly a small fraction (10-20%) of the cost you pay. Any time you feel incensed by price blame the marketing and retail that is where most of the product cost is.
Most of the rest of it is mark-up and greed at the top. Do you think that's going to change based on where the product is made? The only difference in terms of distribution is the ocean crossing. Regardless of whether it's made in North America or shipped to North America, it's still due continental distribution to the same nodes from one central location or another. So long as the unit cost of ocean transport and labour costs abroad undercut labour costs here, there's no incentive to change that model. Shipping things by road in North America is more expensive than sea cargo, and if the cost of sea cargo goes up for fuel reasons, then so with local distribution by surface vehicle. The choke point may in fact be the cost of local distribution. _________________ I can has cheezburger?
Posted: Mon Aug 04, 2008 3:41 pm Post subject: Re: We have become the bitch of China.
Nickel wrote:
Canuk wrote:
Ipods for example are a highly automated product where the direct labour content may be as little as 1 hour per unit. The machinery that produces the Ipod (chip inserters, odd form placement machinery, wave soldering, etc..) are worth far more than the direct labour and likely not as yet produced in China.
Ignoring for the moment that that's just a single instance of a small, expensive product... if it's made in Japan, or Taiwan, or Singapore, does that really constitute an appreciable difference where the geographic particulars of your point are concerned?
Japan has high labour rates, and a reasonable environmental record and doesn't really manufacture the cheaper stuff anymore but they are still a major machinery exporter as is the US, Canada and most of Western Europe. The capital equipment to make the Ipod (or other disposable electronic device) is complex and expensive - the actual Ipod(etc.) assembly is not and can be done in any country with a basic infrastructure (electricity, roads, ports, security, etc.).
Nickel wrote:
Canuk wrote:
However they are rapidly gaining the expertise to make their own machinery and will not need our expertise which is when they will truly be able to compete.
Rapidly gaining? I think you're a couple of decades behind the times. When was the last time you heard of a TV, or VCR, or DVD player, or stereo system built on this continent? We would almost certainly have to hire people from overseas to re-establish the knowledge base and particular infrastructure to compete in these fields now. We've lost so much.
Much greater expertise is required in product design, tooling and machinery manufacture than in the low skill assembly line work - these higher skilled tasks have only recently (last 5-7 years) started to move to China and India. The machinery used in low labour countries to make the consumer electronics was made in Japan, USA, etc. Recent declines (since 2001) in machinery and equipment sales and the increase in import of these items is far more disturbing than the loss of the low skill jobs that actually make the consumer disposible goods. Many tool and die shops no longer design and build tools - the moulds and stamping dies are built in India and China and shipped here where they are finished. This is a recent development.
Nickel wrote:
Canuk wrote:
Keep in mind most products are not sold by what it costs so the labour to produce is truly a small fraction (10-20%) of the cost you pay. Any time you feel incensed by price blame the marketing and retail that is where most of the product cost is.
Most of the rest of it is mark-up and greed at the top. Do you think that's going to change based on where the product is made? The only difference in terms of distribution is the ocean crossing. Regardless of whether it's made in North America or shipped to North America, it's still due continental distribution to the same nodes from one central location or another. So long as the unit cost of ocean transport and labour costs abroad undercut labour costs here, there's no incentive to change that model. Shipping things by road in North America is more expensive than sea cargo, and if the cost of sea cargo goes up for fuel reasons, then so with local distribution by surface vehicle. The choke point may in fact be the cost of local distribution.
Or as Cube has put it the costs are all in the last 100 miles...
Product pricing is based on what people will pay - during the 1960's the portion of direct labour relative to retail price was greater. Cheap energy (cheap shipping) enabled marketing companies to to keep prices stable (or lower) while realizing a greater portion of that price. The reversal of the manufacture will not lea to skyrocketing prices but smaller increases (10-20%).
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Mon Aug 04, 2008 10:39 pm Post subject: Re: We have become the bitch of China.
Nice posts, especially that little ditty from Nickel.
Quote:
"Concerns about the financial health of the biggest U.S. mortgage finance company had driven Fannie Mae's borrowing costs to the highest since March the previous week and its shares had tumbled 45 percent on the New York Stock Exchange. Investors in Asia, the biggest foreign owners of Fannie Mae's $3 trillion of bonds, were asking the Treasury to bolster the government- sponsored company and its smaller competitor, Freddie Mac, said three people with knowledge of the talks....
The next afternoon, before financial markets opened Monday in Asia, Paulson announced the rescue plan, saying he would seek authority to buy unlimited equity stakes in the companies and their bonds if needed, while the Federal Reserve would lend directly to Fannie and Freddie. Congress included the proposals in a broader housing bill that President George W. Bush signed into law last week.
Asian investors were among the most important groups to soothe because central banks, financial institutions and funds in the region own $800 billion of Fannie Mae and Freddie Mac's $5.2 trillion in debt, according to data compiled by the Treasury. U.S. officials were concerned that sales from the region would push lending rates higher, said the people, who declined to be named because the discussions were confidential."
Joined: Jun 26, 2007 Posts: 1620 Location: The Canada of America
Posted: Wed Aug 06, 2008 7:04 am Post subject: Re: We have become the bitch of China.
Canuk wrote:
The capital equipment to make the Ipod (or other disposable electronic device) is complex and expensive - the actual Ipod(etc.) assembly is not and can be done in any country with a basic infrastructure (electricity, roads, ports, security, etc.).
So it comes down to infrastructure and cheap labour, and China has both. We arguably have the first, but not the second. So again, it comes down to transport having to nudge out labour costs, your original point. I still don't see it. We'll have worse things to worry about than where our iPods are coming from if oil gets THAT expensive (like how are we getting grain from Saskatchewan to the Maritimes, for instance). It's a moot point.
Canuk wrote:
Much greater expertise is required in product design, tooling and machinery manufacture than in the low skill assembly line work - these higher skilled tasks have only recently (last 5-7 years) started to move to China and India.
India, yes, but not China. That process began in the 1970s. This is country that's now beginning to export automobiles, and in my experience, that's always when the West sits up and takes notice. It's the warp signature of First Contact. _________________ I can has cheezburger?
Joined: Nov 25, 2006 Posts: 1543 Location: New Jersey
Posted: Wed Aug 06, 2008 9:29 am Post subject: Re: We have become the bitch of China.
allenwrench wrote:
In Walmart today I was looking for some wild caught fish. I picked up a package of frozen Alaska salmon fillets, but when I read the label it said - "harvested in the USA and processed in China."
How messed up can we get to catch fish here and have to ship them to China to have them clean it and do god knows what to them and then ship them back?
When I was discussing this with a Walmart employee he pointed out everything I had on from head to foot and even in my pockets, arms and eyeglasses came from China. (Well, he wasn't exactly right, my underwear came from Honduras.)
I used to be proud to be an American. But we have become the bitch of China.
Sounds more like China is our bitch. Though really it's a mutually abusive relationship (with both parties too numb to feel the pain). _________________ My PO Amazon store (shameless plug).
The above link has a ton of reading material on the subject of Wal-Mart and America's trade deficit with China which by the way increases by $1 BILLION PER DAY (NPR)
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