Posted by zog
on October 17, 2009, 10:58 pm, in reply to "Re: Notice"
The rise (and warfare with) of the "free market" gangs
http://www.telegraph.co.uk/news/worldnews/asia/china/6357024/China-corruption-trial-exposes-capital-of-graft.html
Interesting article thought you might like it
Ya, they have embraced capitalism whole hog, but it takes all the aspects to make a market, good, bad, ugly
Back on topic...over the past 30 years, as the west shipped manufacturing there, they were more or less forced to use us as customers as they built up their industrial base, because they had to repatriate those dollars. This was sort of a petrodollar deal in a way, but we can call it the manufacturing dollar. We give them dollars, so they build stuff for us. They take those dollars and ship them back here, to buy treasuries now, but if you looked, and I have numerous times in the past, at what they were buying from us besides treasures, it was machine tools, the factories, the stuff needed to actually build tools to make more tools to make stuff, to create wealth. They were *forced* to do this initially to get their infrastructure in place, and delayed paying off their middle classes so much internally because they just slap needed the tech we had. Then. Today, they have more than enough, and they no longer really *need* to export here as a market. They have four times the population internally, which is a helluva market already right at hand, plus another two billion people in the areas they are now getting their raw resources from. They don't really *need* the US, nor do they really need the eruozone for that matter.
This is where they are going, and they will be abandoning the US market to a great extent as soon as they finalize getting rid of what dollars they have stockpiled. Once all those FRNs are mostly gone, well, changed into something else more practical for them, poof, they could raise their rates for manufactured goods they offer us to anything they wanted to, because they would have us over a rather huge and extensively large splintery and painful barrel by then, because we simply cannot recreate what we gave away and sold for cheap over a generation and a half now.
This is the major disagreement with a lot of mainstream economists I have now, who just keep insisting china "needs" the US market, like in some sort of fairy tale perpetuity, so they go with that as an article of faith, which skews any further analysis and projections they make.
It was true THEN, when all this started, 25 years ago, but NOT now. They have more than enough infrastructure in place that we have very little of value left to swap to them for incredibly cheap stuff. Any advanced R&D, they already have students and businessmen here who provide it to them, gratis.
Digital IP is the easiest thing in the world now to "fall off the back of the truck" and get moved quickly from point A to B. They don't need the three axis CNC milling machines and all that stuff they needed before, because they got them now and can clone as many of them as they want. *That's* the sort of thing they were buying from us all these years past, or trying to, or getting them from other industrialized nations.
Heck, my boss got caught up in this and just stopped inventing. He'd make something, they would get one copy, a few months later the same product is on the market for half price. He said after he got nailed with that a few times, he just stopped dropping ten grand on patents and just ran limited production runs of this or that he invented (all off the wall specialty ag equipment), sold those copies and never dealt with it again. Just skipped the whole patent part and actually made more money..for a very short period of time. Because the chinese just snag anything like that, it's been one of the driving forces in their success, and our government (inder oprders from the wall sreet goons) looked the other way on purpose,let them get away with it outside of a few token busts for like counterfeit designer purses and so on, for a long time because it kept the cheap stuff rolling in as they pushed extending credit over wealth creation until this credit bubble popped.
It was the sop to keep everyone happy here and not seeing the willful looting of the nation around them and the destruction of the wealth creation part of the economy.
"Hey, you can by this hundred dollar stock in a website that makes other websites! Get rich, sell it for 200, then go get some more of the same kind of stocks",err, we saw how that worked out for the most part, a sop.
Then it was "hey, you can sell houses back and forth to your neighbor, every swap tack on another 50 grand, and do it forever, and get rich, and not have to work!'.err, we saw how well that worked out...
Of COURSE the chinese would take that, all the manufacturing base we had, you'd have to be six kinds of tard to say no to such an offer. So they ran with it, and "got successful".
We are on the downside now, and the curve will be getting much steeper from here on out.
I don't think it will even revive US domestic manufacturing all that much, way too many regs to ever compete against "no regs" production rules and 1/5 to 1/10th price or less labor, and having to compete for resources overseas (we aren't even trying much except for oil in the mideast and caspian, and that's still a crapshoot, they are buying everything up now, cheap, all over the planet and stockpiling it), having to cough up local taxes to pay for increasingly bankrupt local and state governments that are all staring at one buhzillion dollars of bonds they all have issued which will have to be honored at some time in the future, and etc, etc, etc, pensions coming, social security looming for the boomers, what's left of millions of 401ks being dumped on the market just to have some little income, etc.
Then they are bound and determined to introduce a trillion a year new carbon tax on top of all that. Pfffftt. It's burnt black toast, over.
We are in the last of the "good old days" near as I can see or extrapolate, barring some incredible new thing, like a real mr. fusion energy source or something, which I doubt will happen.
I think the US will be lucky to maintain a few slim leads in a few tech areas,(maybe) and maintain some semblance of at least every other year profitable agriculture, and that's about it for real wealth creation here.
Here's an example, right now the US has the lead in electric vehicles..at 100 grand a pop, and they still have to source half the junk from overseas to do it, and, as they say, "quantities are limited". China right now is producing and delivering 10 grand electric cars that are "good enough" to be normal commuter cars in automated factories, I just watched a video on BYD corporation about that. and they are just one of dozens of electric vehicle makers producing and delivering, from electric scooters to small cars and trucks.
Pretty soon they will have that down to "good enough to pass inspections" here and will hit the dealers at 20 grand. So we will guess which will sell better...those or still vapor ware Volts at 40 -50 grand or hundred grand teslas.
Same as most any other manufactured good today. Ya, there's *some* market for high end, but there's a BIG PHAT market for "good enough" and really cheap. And the goobermint had to throw 8 grand at people to get them to buy a few new cars at higher prices, then the market slumped right back down again after that stimulus ran out, because all of them are still too high.
Those are the sorts of slim tech leads I mean, another will be alternate energy "stuff", solar panels, permanent magnet windchargers, advanced and cheap batteries, etc. We may get a one or two year lead, then wham, the tsunami of a fraction of the cost to produce and shipped by the shipload happens. Lose another one. It's already happened to literally dozens of industries, and there's not many left really. Big planes..they are building them, heck, boeing has been teaching them for 20 years, of course they will get good at it. Shipbuilding...uh huh, between the chinese and the koreans, bye, gone. Space launch...they advance a decade every two years. High tech medical devices..see "buy one copy then clone and modify" and they got students all over here sucking down engineering degrees and then sliding right into the heavy R&D places.
And once they really don't need this market here completely, which basically we are at now, the final dregs of that changeover, they really will not care about IP or anything like that, because they can say "fine, we get all the IP we want anyway, one way or the other, and we won't sell to you, don't really need your market anymore, do we?"
Hate to sound so very pessimistic, but I think we blew the chance of recovering about ten years ago or so (really earlier than that) when we should have gone emergency protectionist and tried to preserve some critical industries and gotten REALLY serious about becoming energy independent across the board. We didn't, we went to "paper financial products" as the most important industry, as we can see by how much the government went into overdrive to save the hedged derivatives swap arounds boys. THAT they went full bore "protectionist" on. Oh well.
And that's why (one of several big reasons) I think trying to change the overall system is such a waste of time,really, and why adopting personal preparedness/survivalism and a more independent and sovereign lifestyle is a *much* better option for a lot of people today.
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