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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Robert Douglas who wrote (3070)5/4/2001 7:09:31 PM
From: Lee  Read Replies (2) of 3536
 
Robert,

I'm surprised more is not being made of the worldwide over-capacity in the auto industry. This industry is still a large percentage of our economy. I agree that there are a number of pressure points on the profits in this industry and its leaders will increase pressure on both exchange rates and free trade.

I concur with Darleen's comments about cost as well. Since we do have worldwide over-capacity in a number of industries, along with profit pressures, all things being equal it will be the higher cost sites that are shut down. Now all things are not equal, such as sovereign risk and company politics. But there will be many choices like Intel's where the US operations close. Even if US only sees our fair share of the reductions, this will mean less jobs, less output, and the resultant political effects.

This was one of the more upbeat Makin articles I have read recently. I can not help but think he is asking the readers to read between the lines like you and Darleen have and say yeah but:

...what happens US consumers aren't finding jobs, start to save, and curtail consumption?
...what happens when income and sales tax receipts start to fall, government welfare and unemployment expenditures go up, and faith in the US leadership role falters?

Lee
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