Collapse of U.S. Economy Imminent *

it's called patriotism and nationalism
two of the biggest things that prevent a one world government

 

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nothing wrong with patriotism, but nationalism is usually a bad thing when the rest of the world TOLERATES rather than CELEBRATES our existence.

 

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Sell to China.
China's masses are benefiting only a little from the wealth pouring into China. (First country history of world to receive more than $100 billion of direct foreign investment in one year.)

Some Chinese are much "more equal" than others in modern, Orwellian China. The real salaries of rural workers increased by less than 10% in 2005. The urban average I forget (was about 20%), but the managerial class by more than 40%.

Soon the top 2.5% of the population will have 10 times the purchasing power of average US citizen. (Not even considering that US average wage has now decreased in real term for four straight years.) Because Chinese population is 4 times larger than US this means in a few years, the top 2.5% of Chinese population, with 10 US times average wage, will have MORE PURCHASING POWER THAN ALL AMERICANS. (This does not even consider the highly probably decline in the purchasing power of the dollar.)

Your are correct, however, that most of the world will suffer if the US collapses economically, but not for the reasons you think. Most US dollars and most US government bonds are in foreign hands. If these assets lose most of their value, of course the holders will be hurt.

Most asian countries already sell to China more than they do to US. China is a great assembly plant, putting together in many case, sub components it imported from other Asian nations. This trend is also increasing rapidly. Ironically, because of the rapid salary increases of factory workers in China, it is getting hard for China to compete with lower wage Asian nations in the low value added steps like making steel, so they import components and raw materials and make the high value finished products.

All the world's car makers are franticaly building new plants in China while closing them in the US, because China is where the purchasing power will be in the next decade. Already more million dollar homes are being built in China than anyother country. (Some are already very much "more equal" than others in the great people's republic!)

 

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I think the time to be really be alarmed is not now, but when and if foreign divestment in the US economy accelerates. As Billy T and others have pointed out, the US economy is no longer the world's clear economic leader. Political antipathy toward the US, nervousness about our economic stability, combined with a sudden crisis, could conceivably result in our having the rug pulled out from under us very abruptly, potentially causing our titanic economy to roll over.

One trigger could be a pause in Mideast petroleum export to the USA, as a direct result of recent American overstretch and disruption. There now are many motives and means for various interests to cause energy supply interruptions to happen to us. Under these circumstances, I expect foreign investors are formulating contingency plans for either bailing early, or for riding out a sharp dip in the US economy.

Into that calculus, there must enter predictions of the behavior of other foreign investors, in the event that the world's greatest debtor suddenly takes a major economic hit. There is some unseen (to me) threshold, beyond which we might witness a precipitous and devastating sellout. It concerns me that crisis such as the collapse of the Saudi monarchy or hostility with Iran might suddenly leave the US economy simultaneously out of gas and out of credit.

I don't consider a collapse of the US economy imminent at this time. But I am worried that a crisis could leave us extremely vulnerable to a precipitous downturn in the near future. Can anyone point me to a contemporary description of foreign investment trends in the US? I have been unable to Google up data more recent than 2003 .

 

Google searches web pages (Old history in the finance world.) I suggest any of the large brokerage firms for infromation that is reliable and very recent. for example, you will find:

"In reality, manufacturing capacity is now expanding much faster in China than in the G-10, as production is progressively shifted from high income countries to China. The most striking example of this shift is provided by Korea, where the average annual rate of growth of manufacturing capacity was 8.8% from 1980 to 2000 but only 4.4% since 2001. By contrast, manufacturing capacity is expanding by 15% per year in China, a number we take with caution, for lack of reliable data on operating rates. However, even assuming that capacity would continue to grow by 15% in China, it remains that global capacity, including China, would grow slightly below trend (2.8% on our estimates, vs. 2.9% for the long-term trend). Since global capacity is now below trend, companies need to accelerate the growth rate of capacity in order to meet with future demand. Interestingly, capacity is already growing above trend in Germany, which is not known as a low cost manufacturing platform."

as about 5% of the latest (27 Jan 05) weekly report from :

www.morganstanley.com/GEFdata/digests/latest-digest.html

www.bloomberg.com is also good source, especially the news & commnetary section but there are many others also. Most can provide details on any company, world wide. (See last paragraph.)

Yesterday, I forget where, I read GM lost 8.6 billion dollars in 2005 or $15.13 per shair. I just checked with Charles Schwab (you need an account to get good data) and price of GM closed at $23.80, up from the 18.33 bottom of a few weeks ago but way down from the $70 peak of a few years ago.

Ford is making a good effort to avoid following GM into bankruptcy, but next year when at least two small (but four passenger) efficient Chinese cars are sold in US for about 1/3 the price of a comparable US made car, I do not see how this will be possible. India's Tara motors is planing a new four passenger plastic car (glued together) that will sell for $2,200 in 2008, but initially only 100,000 will be produced anually in the new factory, so export to US will surely not be before 2010.

 

Again, idiot.

Americans have been FAT and STUPID for decades you troll.

Jesus.

Just because you can't get a job because YOUR government supports sending all the manufacturing Jobs overseas or to Mexico as well as over to China - is not a reason to hate the Chinese.

Hate your own God Damn Government.

Stop incessantly putting the blame on other hard working blue-collar people and own up to the fact that people like YOU have made this situation by electing these crooks into Government – that’s your fault and your responsibility, not the f*cking Chinese fault for Christ’s sake.

Jesus, most Chinese are like anyone else, working to for shit money and hoping for that elusive better future that’s always just around the next corner.

 

Uh, what? Heh.

- N

 

Glued together is not funny. - Several of the most modern airplanes are now. Modern glues are amazing, expecially on plastics.

Car will also (I think)* have a variable speed transmission. It is nothing to laugh at, especailly if your job is in any way related to the dying US auto industry.

I think the car is designed, mainly for urban use or at lower high way speed in relatively short trips. (Has a small HP engine and very high fuel efficiency as it is light weight and under powered by US standards.) How often do you exceed 60mph in the city? Would you like 40 to 50 mpg? (and a $2,200 price tag?) - I do not know these to be the true numbers but they are in the ballpark. (Only the $2,200 has been officially announced, the rest is rumor and guesses.) I bet they can sell all they can make, and that the waiting list will be months. Laught at that while crying for detroit, if you can. Many laughed at Henry Ford and the VW too, but a revolutionary, cheap, no-rust, efficient, car may be just what Detroit should have been developing instead of SUVs.

If they sell them in Brazil, I will buy one faster than you can say "Fuck Detroit."
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*Tara motors has at least signed a contract with a maker of these modern variable speed transmissions, but I forget the details, perhaps they are building a factory in India to make them. Do a little searching and find out the facts. One of the advantages of building a new factory from scratch is you can use the most modern and economical technology, rather than try to adapt a plant and its machines that are basically pre-WWII.

 

People have a pretty firm habit of saying "the Chinese" when they mean Chinese business and Chinese government, which are pretty much one item. Michael, I think this is pretty close to being a spelling flame here.

The Chinese are decent people. Their leadership are psychopathic killers. I fear that a lot of what American businessmen and politicians want to emulate is the psychopathy part. The success part comes from American government prying open American markets to the cheap garbage that they pass off as manufactured goods.

 

I thought you were kidding. Is that true? I mean, other than the fiberglass frame and any bondo kits, aren't the main parts still welded together?

And still, only $2,200 for a whole car? I find that very hard to believe. Heck, my uncle has a mountain bike worth more than that, heh. But yes, if true, I would buy one in a heartbeat.

- N

 

In contrast to some skeptics here, I pretty much agree with a great deal Solve said. Throughout human history, dominant empires have all eventually fallen. In many respects we live in a totally different world to that of our ancestors, a technological world. But ultimately economic factors always rule supreme - they are what brought the mighty Roman Empire to its knees before anybody even knew there was such a thing as an economy!

For the last thirty years America has become increasingly decadent - a word many people associate with certain hedonistic modes of behaviour, but which simply means "in a state of decline". But the hedonism certainly is going to be a major contribution to that inevitable collapse and fall, primarily in the vastly increased use of precious resources ordinary Americans are more than willing to squander.

Re: internment camps, I don't think these need to be set up specially. I'm pretty sure that here in Britain, if a large scale insurrection had to be put down, the government would be able to make use of existing facilities which are currently used for different purposes, such as old army camps. We've got disused wartime airfields that could be converted in a flash. America has hundreds of thousands of square miles of desert that can easily be put to use. (Though, seriously, nobody's going to build an internment camp for housing a million people, you're clearly storing up more trouble. Divide and conquer, that's the motto.)

It's time for ordinary Americans to wake up and smell the coffee! The endless upswing in economic prosperity bought by cheap gasolene has to come to an end sometime soon. Eventually you have to pay the ferryman.

Last note, to indicate that I'm not reading totally uncritically:

Uhm, they're not going to nuke Iran. The whole point of launching an invasion would be preventative. Iran is moving towards nuclear capability, but they don't have it yet, and certainly the US and the UK would not dream of risking global opprobrium by precipitately using nuclear weapons against a (currently) unarmed nation.

 

Details are hard to come by even though I have owned stock (Via ADRs) in Tara motors for little more than a year now. (Almost all my portfolio is in ADRs as I fear dollar collapse - several show more than 300% gains as more people are doing what I did some time ago.) I think the idea is lightweight and rust free. Perhaps the motor is with aluminum block even. _I think it is like a powerful motorcycle motor, but they are keeping real details quiet for competitive reasons. Their first export market will probably be China, but as India has started a large super- highway system the local demand will be insatiable for years.

 

How do you know that? Do you believe the same sources that told you Iraq already had chemical / biological WMD and was "moving towards nuclear capability"?

Do you not find it a strange coincidence that only when oil exporter is begining to sell oil for Euros, is their WMD threat is discovered? (Oil, sold exclusively in dollars is the ONLY reason* that dollar still has value. - Dollars cost less than one cent to produce and have been in great abundance. "Oil backed dollars" are America's most profitable export.)
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*There nothing else "made in USA" that can not be bought more cheaply elsewhere, at least nothing I can think of. Perhaps you can?

 

No, I'm saying that Iran is not nuclear, and the Western Powers are not claiming that they are nuclear. Only if the West were saying that Iran are nuclear and using that as an excuse to nuke Teheran does it make a difference if Teheran are nuclear or not. They are planning to invade Iran to prevent them becoming nuclear, but that does not require nuclear weapons.

Uhm, there's no doubt about Iran's desire for nuclear power capability, they are not making a secret about that themselves. They have also said that they have the right to have nuclear weapons to defend themselves against Israel if they want to. This has nothing to do with making up an imaginary Iranian nuclear threat, only with how such a threat would be dealt with - whether it was fictional or not - and I'm saying that the US and UK may well repeat their Iraqi disaster, but they're not going to do it with nukes.

 

I agree. Do you notice that US and Britain do not use Euros, but none who do were unhappy with oil being sold in Euros?

The French and Russians who got their oil contracts cancelled were especially unhappy with and strongly resisted the US invasion policy.

Are you aware that 60% of Iran's oil is currently sent to Asia? Do you think there will be no repercussions if that supply is shut off as the US and Britain cancel their contracts, even if done non-nuclearly?

In reality their economic reaction's (buying oil at hundreds of dollars a barrel, etc. with their trillions of dollars in reserves) effects upon the US and global economy may be much worse than if a nuclear bomb were set off in NYC harbor. - IMHO. GWB will not care. That price for oil will make his major campaign supporters happy and provide more reasons to call for everone to "rally around the flag," "support the president" etc..

 

its becoming clear that Heppe is a masochist, so i wont comment on the trailer park web site or the boy scout towers. i wont give him the satisfaction of calling him names 'cept to say he's faking it because no one is that dumb.


Mikey Said:

sweat shops and child labor wee heee. gee Billy is it better to pay a worker 5 pennies a day or $12.00 an hour? guess you opened your eyes to the world yesterday.

just keep practicing:

"you want fries with your burger"

 

I don't know nearly as much about economics as I would like, but what troubles me the most is the difference is gas prices between the US and, say, Britain. When we finally do balance out with the rest of the world (leaving aside the problem of diminishing supply entirely), it's going to have to be painful. It seems inevitable. And to me it seems like there's a decent chance it will be catastrophic, especially with all the conservation denial here. Just that one issue alone makes me want to move somewhere else.

 

Hey, In-N-Out Burger employees make $10.50 an hour over here.

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- N

 

The difference in gas price is mainly due to taxes.

 

And the next question is:

In whose interest is it really to have had low taxes on gas?

Hint - think about the type of cars cheap gas has promoted, what a life style of going to Wal Mart several times each week requires, How far did your food travel to come to your table, What needing a car to drive to work, because there has been little investment in public transport, etc. has done to design the US infrastructure.

Now think how secure your life style is with the infrastructure system built by Detroit, the oil industry and low taxes on gas, as we enter the peak oil era, and China and Japan can pay more than $100/a barrel* for what oil is available.

Should make you angry, but probably you will only wish you had bought oil company stocks, to share in the huge profits of the few, if you are like most and can not see what will soon happen to you, not your grandchildren.
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* I doubt that oil will still be sold for dollars when their value is falling rapidly. I.e. soon after China, Japan an S.Korea start to spend their dollar reserves for oil and begin to stockpile it in salt domes also. Don't think your car will ever see any gas from US salt domes. - That is the fuel that will maintain the "essentail services" (read that as military and police).