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Thread: Sleeping Dragon Awakens...

  1. #1
    God/dess threlayer's Avatar
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    Default Sleeping Dragon Awakens...

    ...even more.

    This from http://online.wsj.com/article/BT-CO-...atestheadlines
    "DOW JONES NEWSWIRES
    Toyota Motor Corp. (TM, 7203.TO) said Sunday that it will resume operations at an auto assembly plant in China starting Monday as a strike at a local parts plant was settled Saturday amid labor disputes spreading at automobile factories in the world's biggest auto market.
    The Japanese car maker will restart operations at its car plant in Tianjin after a shortage of certain plastic interior parts from the parts producer, where workers walked off the job Thursday, started disrupting operations at the car plant Thursday night, a Toyota spokesman said. All three production lines at the Tianjin auto plant were idled by Friday afternoon.
    Toyota halted production temporarily at a crucial time for the auto maker, which saw a relatively moderate growth in sales in China of 21% to 700,900 vehicles last year compared to a nearly 50% surge in the country's overall market to about 13 million vehicles.
    The auto plant in Tianjin is one of Toyota's largest in China, with an annual production capacity of 400,000 vehicles.
    Labour disputes over pay are spreading in China in the auto and some other industrial sectors.
    Among the companies recently hit by strikes in China, Honda Motor Co. is facing a string of disputes at auto parts factories that pushed Honda to suspend temporarily its auto assembly production from late last month to early this month.
    Toyota was forced to halt auto production as it was unable to procure sufficient parts from one of Toyoda Gosei Co.'s joint auto parts production ventures due to the strike. Toyota owns a 42 % stake in Toyota Gosei. The venture is called Tianjin Toyoda Gosei Co.. "

    Cheap Chinese labor won't be cheap chinese labor too much longer. When people are faced with a supply of goods to buy, they want a pay level that lets them buy those goods. Basically this ytells me that China is in some ways at the stage in its economic development that the US was at the end of the nineteenth century, just when labor unions began to be formed. This is a greatly increased development rate and in probably 20 years or less (unless they have another Cultural Revolution), their economy will have many of the problems that beset western countries now.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

  2. #2
    Banned Melonie's Avatar
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    Default Re: Sleeping Dragon Awakens...

    ^^^ agreed ! I'll even expand on your observation and propose that history will also repeat itself in other ways ... such as China gradually becoming a net debtor nation as their increasingly expensive labor costs ( and probably increasing worker safety and environmental costs as well ) prompts a shift to lower cost Eastern European, Asian and eventually African countries, and as their 'younger generation' develops a taste for the 'good life'.

    However, neither you or the author of your link story make reference to potential impact of these developments on Americans or Europeans. In both cases, the (formerly) low net costs of production offered by China provided an 'artificial' standard of living increase for the people of every 'first world' country. As these net costs of production rise, and as the Yuan valuation rises with them, our dollars and euros will buy less and less 'value' from Chinese sources. And like China in the 90's, another evolution of outsourcing ... this time to 'armpit' Eastern European, Asian and African countries ... will also take 10 years or so to materialize.

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    God/dess threlayer's Avatar
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    Default Re: Sleeping Dragon Awakens...

    Quote Originally Posted by Melonie View Post
    ....prompts a shift to lower cost Eastern European, Asian and eventually African countries, and as their 'younger generation' develops a taste for the 'good life'.

    ... In both cases, the (formerly) low net costs of production offered by China provided an 'artificial' standard of living increase for the people of every 'first world' country. As these net costs of production rise, and as the Yuan valuation rises with them, our dollars and euros will buy less and less 'value' from Chinese sources. And like China in the 90's, another evolution of outsourcing ... this time to 'armpit' Eastern European, Asian and African countries ... will also take 10 years or so to materialize.
    And before China there was western Europe, then Japan and then Taiwan, etc. There will always be lower-cost labor for exploitation, but hopefully they will be, if allowed by government policies, on their way up to a decent lifestyle.

    Again my biggest concern is not that competition is catching up with us, but that we are promoting/allowing it too fast for our country to stabilize itself (due to lack of understanding in government policies). I think that as the world's standard of living becomes more equalized among the different countries, the world will become a much better and safer place to exist in. For example wars that are now fought mainly over inequitable resources and economic conditions will become less frequent and health will improve. And as health improves and cultures do not see that massive families are any longer necessary, world population will begin to stabilize over the centuries. And that will bring about even more increase and parity in the human condition. And in my opinion that is all important.
    Last edited by threlayer; 06-21-2010 at 09:52 AM.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

  4. #4
    Banned Melonie's Avatar
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    Default Re: Sleeping Dragon Awakens...

    ^^^ again I don't want to delve too deeply into political policy here in DD. However, what you are saying makes perfect sense. If the de-facto US standard of living available from a $15 an hour paycheck job ( after US dollar devaluation / price inflation ) is not significantly higher than the Mexican standard of living ( with a non-devalued Peso ), then much of the violence resulting from illegal Mexican immigrants in the USA will probably disappear. The reason of course will be that there won't be much incentive for them to journey north of the border any longer. However, I suspect that the violence / crime stemming from legal US residents / citizens will increase a whole bunch after their de-facto standard of living declines significantly ! The 'dirty little secret' here is that global equalization of standards of living will have a positive effect on Chinese workers, but a negative effect on US and European workers.

    Back to economic facts ... this morning the Chinese gov't allowed the Yuan to gain in international exchange rate versus the US dollar for the first time in 2 years. This resulted in an immediate drop in US retailer stock valuations because the wholesale prices they must pay in Yuan instantly increased in US dollar terms. Once the inventory cycle rolls over ( i.e. US retailers must order new stock from Chinese suppliers ), those US retailers will either be forced to float US dollar denominated price increases for Chinese goods or be forced to 'eat' the higher wholesale costs out of their own profit margins.

    ~
    Last edited by Melonie; 06-21-2010 at 01:53 PM.

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    Default Re: Sleeping Dragon Awakens...

    I think it is the Chinese performing an experiment and the yuan will return to being pegged again. They are basically controlling the money supply to the US government and seeing what happens when they control the money supply to the commercial end of our society.

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    Default Re: Sleeping Dragon Awakens...

    ^^^ an observation that also strongly implies that all aspects of the US economy are now subject to 'strategic manipulation' by China ( and other major US creditor nations )

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    God/dess threlayer's Avatar
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    Default Re: Sleeping Dragon Awakens...

    Quote Originally Posted by Melonie View Post
    ^^^ again I don't want to delve too deeply into political policy here in DD. ... However, I suspect that the violence / crime stemming from legal US residents / citizens will increase a whole bunch after their de-facto standard of living declines significantly ! The 'dirty little secret' here is that global equalization of standards of living will have a positive effect on Chinese workers, but a negative effect on US and European workers.

    Back to economic facts ... this morning the Chinese gov't allowed the Yuan to gain in international exchange rate versus the US dollar for the first time in 2 years. This resulted in an immediate drop in US retailer stock valuations because the wholesale prices they must pay in Yuan instantly increased in US dollar terms. Once the inventory cycle rolls over ( i.e. US retailers must order new stock from Chinese suppliers ), those US retailers will either be forced to float US dollar denominated price increases for Chinese goods or be forced to 'eat' the higher wholesale costs out of their own profit margins.

    We just remember that the economic pendulum inexorably swings both ways.

    ~
    Consumers in the US, with their profligate spending, may well be in for a rude awakening as more and more goods are imported from China et al, and as prices rise, after years of price "rollbacks." As opposed to that trend, a normalization is surely due. We must realize that spending beyond our individual and collective means can only be a temporary state. TRhe big problem is which politicians will relay that message to the voters?
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

  8. #8
    Banned Melonie's Avatar
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    Default Re: Sleeping Dragon Awakens...

    We must realize that spending beyond our individual and collective means can only be a temporary state. TRhe big problem is which politicians will relay that message to the voters?
    That's easy ... just look for the politicians covered in tar and feathers ! There is a real concern that 51%+ of US voters now have a personal stake in the gov't continuing to spend beyond our individual and collective means in order to continue their welfare checks, gov't worker paychecks, college tuition grants, SCHIP / medicaid health care cost coverage, Social Security checks etc. This situation was ultimately the cause of the Roman Empire's 'fall' ... with a distinct future possibility that history could repeat itself.

    Again I don't want to go off the deep end in regard to political content, but it is at the heart of your issue. From the Clinton years at least, ultra low price ( in US dollars at least ) Chinese imports have provided an increasing de-facto standard of living 'subsidy' to a huge number of lower income and some number of middle income Americans. This appeared to be a 'magic formula' that involved no cost to the US gov't. However, like all 'magic tricks', the truth of the situation was there for all to see if only their attention wasn't being deliberately misdirected. The 'cost' of globalization, i.e. ultra low priced Chinese imports, was arguably the direct result of China stripping away major US cost components such as worker benefits, worker safety, environmental, taxes etc. While this provided a 'subsidy' to the American low income and middle class standard of living in the medium term, it also provided powerful incentives for basic economic erosion of the US economy in the longer term by making US industries uncompetitive. That lack of competitiveness resulted in lower earnings / profitability that threatened to reduce the US standard of living from the supply side ( i.e. shrinking / disappearing paychecks ) ... which was not 'acceptable', and which led to the phenomenon of replacing lost paycheck dollar spending with the spending of borrowed money !

    Well the longer term has now arrived, the ability to borrow and spend is now limited or non-existant, and America as a whole is faced with an inescapable need to reduce its collective standard of living to restore balance between the supply side ( shrunken / vanished paychecks ) and the demand side ( actual spending = standard of living ). The next phase of course is deciding ( by whatever means) exactly which segments of Americans are going to be expected to sacrifice their current standard of living in order to continue subsidizing the current standard of living of other segments of Americans. And the necessary subsidy level to maintain the current standard of living for lower income and some middle class Americans grows higher with each uptick of the Chinese Yuan !

    ~
    Last edited by Melonie; 06-24-2010 at 03:51 AM.

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    Default Re: Sleeping Dragon Awakens...

    Who's the slave labor now?

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    Default Re: Sleeping Dragon Awakens...

    Who's the slave labor now?
    Actually there is more to this question than a cursory read would indicate. The 'gold foil hat' would say that the new slave labor is middle class Americans ... who are being forced to work harder despite receiving no additional reward in order to provide more tax revenues for their governmental masters to redistribute !

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    Default Re: Sleeping Dragon Awakens...

    As I've said here many times, you can prepare for and accept the future of globalization, but it has been foolhardy to promote it or allow it to destroy economic that cannot adapt to it fast enough. that surely started with Clinton but no one accepted my premise. This is the province of monetary policy, profilgate govt spending, trade limits and tariffs etc.

    Essentially we have "given" technology, capital, and business dealings with a country that is wiley and shrewd enough to use them against us. Stupid us.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

  12. #12
    Banned Melonie's Avatar
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    Default Re: Sleeping Dragon Awakens...

    that surely started with Clinton but no one accepted my premise
    Actually, a LOT of people accepted the premise ... and warned / complained loudly about the future ramifications. Remember Ross Perot's 'giant sucking sound' ? But for better or worse, only 15% or so of Americans were worried about those negative future ramifications at the time ( but which Americans now find themselves knee deep in ). Instead, at the time, the vast majority of Americans were far more concerned with enjoying the shorter term advantages ( which have now all but evaporated ).

    The best analogy I have ever heard for America's current situation re globalization came from a Belgian financier ( who owns an extremely nice TriMaran and who mixes an awesome Margarita btw ! ). He characterized America's standard of living over the past 15 years as being the result of a national 'reverse mortgage' ! But like a real reverse mortgage, at some point the monthly reverse payments stop coming in, the original asset is now owned by someone else, and the 'former' owner is left without a proverbial 'pot to pi$$ in'.

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