US pledges financial rescue plan (2008)

[Arthur]

I am glad I quit this thread... what a flamefest.


+1

I would like to hear what song all the I LOVE USA people in this thread are going to sing about 5-10 years from now when nothing gets manufactured or designed in the US anymore.

Turiko: I'll make a public wager with you -- R1000 in today's money -- that in 10 years the USA's industrial base as % of GDP will be proportionately larger than today, and still the most efficient and productive on earth. All we need to agree is the key metrics and their source - I'm open to proposals.

 

[vxv]

As an aside, both India's and China's economies are far more leveraged, and China especially has serious structural problems in the banking system (ie massive bad/poor debts, currently sheltered by govt). Almost every economist who watches these things knows especially China has a massive structural problem with poor/bad loans to unproductive enterprises. China cannot keep all the balls in the air (servicing debt with no-profit exports) and pretty soon things will melt down, just as they did in Japan and Korea.



The China Syndrome: Meltdown Is Imminent (Feb 08)

China property meltdown feared (13 Sept 08 - before Lehmann Bros)

Are you joking? Again:

If one compares China's $1650bn in foreign reserves with the US's $62bn, the direction in which money power is shifting is clear.

http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-25_2398076

NOW WHO IS REALLY IN TROUBLE?

 

[boramk]

LOL, we’ve (SA) only been busy for just more than a decade and look where we are now. That’s exactly my point, other countries are moving up were the US are slowing down. We have a lot of resources and potential. LOL, we are all banana pickers in SA, however I know for a fact that the most rich and effective people remove their money they made in SA to another country.

Firstly we have been around for 300 years. If you don't count the Apartheid government and the government before that you are an idiot. Seeing as they built up what SA is today. If we were here for 10 years as you suggest, we would be worse off than Burundi as we have had NOTHING to start off with.

And your misguided opinion of how every country is growing while the US is slowing... It's called a MATURED economy. Look at Japan etc. China and India will continue to grow as they are POOR. They started with relatively nothing.

The USA can grow at 2% and China at 10% but in real terms, USA would have added $300billion more to their GDP than China. END.

 

[Turiko]

China is an export driven country and America's trade deficit can be blamed for that.
I'm, just hoping it gets fixed by the next administration, Bush messed everything up

You are very far off the mark for blaming Bush for all of this. A lot of this has been around since for many years. China has been a threat since the 1990's already.

 

[vxv]

The banking system aside, I cannot comment because I am no expert about the Chinese banking system. However there are a few tangible things I see:

1- The Chinese are killing the market segment in which we operate. We are working our butts off to fight them off with their cheap goods, imported into SA at better prices. We can't really compete on cost because it costs us a ton in labour. People don't want to work here for peanuts and all you can get out of them is no more than 45 hours a week max. The Chinese are not hindered by these problems. It is not only our market segment. It is computer parts, motor vehicles, home appliances.... the list goes on and on.....

2- Stuff must be happening there, particularly in Shenzhen. I have personally lost three good mates of mine, to China, they're all in the IT field and they went to China, and now they're the directors of a company that manufactures IT products.

Good Argument.

 

[boramk]

NOW WHO IS REALLY IN TROUBLE?

China EXPORTED more, hence the bigger foreign reserves...
BUSH administration who created a TRADE DEFICIT. All this anti American hoo ha is from 2001 ONWARDS. 2008 hosts NEW elections, meaning NEW policies.

Democrats historically mostly had a surplus, we can hopefully see that soon with Obama...

THEN we will see about the Foreign reserves story.

 

[Turiko]

All bets are off, I do not wager with people on a public forum.
Besides, I know what is going on, and I know I am right because I don't look at numbers, I look at tangible facts. I am in the electronics industry, and any fool in this industry can see what is happening. We buy our parts, here in SA, directly from China, the Americans are TOO EXPENSIVE!!!! We are in this business to make money, not to make a loss. To remain competitive we need to get our parts in at the lowest cost, and getting them from the US, and via all their middlemen, is not feasible. The Chinese can custom manufacture a graphics LCD for US$ 1.44 FOB out of Ningbo. An equivalent American part costs many times more than that. Those of you who are electronics engineers will agree with me that there is NO CONTEST with that price, for a CUSTOM LCD never mind a standard one.

Guess what percentage of semiconductors are made in the good ole USA these days?

Oh, and when it comes to injection moulding tools, China is also killing off all the competition. Many SA companies have outsourced the toolmaking to China, because

1) It is cheaper
2) China can deliver within tight deadlines
3) China doesn't come with excuses and sad stories about "how difficult this insert this" and "we need a slide and it will take 6 weeks" BS stories

Do you know that Tupperware are already having their moulds made here and in China, because the Aussies and the Americans rip them too much for it and the tools look like ****.

 

[boramk]

You are very far off the mark for blaming Bush for all of this. A lot of this has been around since for many years. China has been a threat since the 1990's already.

No trust me, Bush threw America way off the mark. Way way way off the mark.
You telling me that if another Bill Clinton who had billions in surplus came instead of Bush we would be seeing this?

 

[Arthur]

You are very far off the mark for blaming Bush for all of this. A lot of this has been around since for many years. China has been a threat since the 1990's already.

Agreed. In third-world countries the political leadership makes a significant difference to the economy. Not so in the USA. Blaming Bush or crediting someone else for economic performance is merely playing politics. Much to vxv's chagrin, it is not a command economy (he thinks the communist economic model is best!).

 

[boramk]

Besides, I know what is going on, and I know I am right because I don't look at numbers, I look at tangible facts. I am in the electronics industry, and any fool in this industry can see what is happening. We buy our parts, here in SA, directly from China, the Americans are TOO EXPENSIVE!!!!

Guess what percentage of semiconductors are made in the good ole USA these days?

That is true. China is cheaper but it is because of their robust population and wage rates. America is developed with high wage rates. You cannot compare those two. China will win easily.

And it is still USA btw (Intel). Followed by S. Korea, Japan, S. Korea again, USA again and then Chinese companies.

 

[boramk]

But I do admit. China is growing, getting stronger and the foreign reserves do point out to China....

 

[Arthur]

boramk and vxv: Just to educate me (I'm being genuine) - please give me some real examples of actual Bush economic decisions/actions. I really can't think of any, so can't comment on your assertions that he messed up the economy.

 

[LazyLion]

New American Dollar Bill in circulation....

 

[boramk]

boramk and vxv: Just to educate me (I'm being genuine) - please give me some real examples of actual Bush economic decisions/actions. I really can't think of any, so can't comment on your assertions that he messed up the economy.

Under the Bush administration, we have saw:


[*]US Debt double (hence my foreign reserves argument)

[*]The invasion of Iraq caused somewhat differences in oil prices as well as heavy government spending. Government spending lead to inflation to dilute the currency which is also attributed to higher oil prices. This also contrubuted to 10% of the debt.

[*]Housing bubble which can be tied with the recent Wall Street crashes which also lead to a butterfly effect of things around the world

These are probably the main.
Now that being said, he wasn't an awful president, he just made very wrong decisions to put America where it is now.

 

[icyrus]

1) The cost to make a product in China is cheaper than having it made here in terms of input labour cost. And here we constantly have to beg and plead with people here every day to get them to do the job they are paid to do- yet if we don't pay them in full and on time, big **** for us we get taken to the CCMA.

Cheaper labour. So why do you think it is cheaper and do you believe it will stay that way?

 

[Turiko]

I am growing tired of having to explain the obvious but here goes:

Labour is cheaper in China because their workforce is very productive for a very small wage. China is one of the most populous nations on earth, they've got a huge number of people in their country and those people need jobs. Many of them are willing to work for little money, in some cases, food, to be employed. They have an edge because they have a work ethic about them (most asians are like this including the Japanese).

Unless they eradicate sweatshops completely in China, which I doubt will ever happen, China will remain the cheap manufacturer for the world.

 

[icyrus]

I am growing tired of having to explain the obvious but here goes:

Labour is cheaper in China because their workforce is very productive for a very small wage. China is one of the most populous nations on earth, they've got a huge number of people in their country and those people need jobs. Many of them are willing to work for little money, in some cases, food, to be employed. They have an edge because they have a work ethic about them (most asians are like this including the Japanese).

Unless they eradicate sweatshops completely in China, which I doubt will ever happen, China will remain the cheap manufacturer for the world.

So what you are saying is that despite China getting richer and richer there will be little to no trickle down to the general population, who will continue to be practically slaves? And you expect this to carry on indefinitely?

Ok, you're entitled to your opinion, but I have an interesting bridge you might consider purchasing...

 

[vxv]

Sorry to go on about the Chinese vs USA economy, but posters have raised an issue and I'm on a roll.

US (mid-high risk or 'bubble') debt exposure is perhaps $1.3-trillion or about 10% of GDP. No-one knows the truth about China, but conservative estimates put bad or 'bubble' debt there at around $450-billion or 14% of GDP, and perhaps as high as 18% or even 20% ... no-one knows by just how much collateral is overvalued, so the reality might be worse than imagined. It's certainly not better than the officially admitted figures. And China has a far smaller development cushion than the USA, exacerbated by the great disparities between the coastal third and the rest. By some estimates China's growth has already passed peak.

As an aside, it's worth pondering that by 2010 there will be some 30 million (some reports say up to 80-million) Chinese males who will never find a wife because of population distortions brought on by cultural discrimination, the One Child policy, and the female abortion holocaust. Also, serious labour shortages (believe it or not, in a country of zillions!) are already being felt, leading to wage inflation of >20% in 2008. When (not if) the bubble bursts and the inevitable social unrest follows, it'll be interesting to see how these millions will be deployed ... will The People's Party in Beijing turn to foreign adventures to deflect local problems...?

The world's doofus economy sits west of Japan and south of Asian Russia.

This is a very good argument and I agree entirely. It would be nice to actually have a current comparison and a definite solution to population growth.

 

[vxv]

http://www.koreatimes.co.kr/www/news/nation/2007/09/117_9485.html

Just wondering when vxv is going to reply to his thread

Just goes to show working more does not suggest more effectively. I agree with this, we are human and not machines.

 

[vxv]

Nice link, boramk.
More from your story (note the last para, vvx):

noted...