Maybe it is in the best interest of the US (given the new environment) that the USD be lower.
The competition greatest advantage is low cost, so why not deliver a one two punch with products that are high quality AND low cost?
The problem is not technology but wages. The difference between US wages and those in some Asian countries is so very much that a 30% devaluation in USD does not help much to close the gap, I am afraid.
Yes, however... if wages were to be reduced, the US is in a far better position to do so, as I believe that the Unions at some point will either "see the light" or else become irrelevant. As for technology, I meant to say that there are some fields (biotech, nano-technology) where the US is still a leader, so cheap labor in those fields may not be needed.
At large, the US population has a better mindset to do what it is needed to compete, whereas the Europeans I doubt they are willing (or even able) to do so.
In fact a possible "partnership" of sorts with Mexico, and/or the rest of Latin America could be a possibility to counter Chinese cheap products...
I mean why not go to Bolivia and train some people there... to manufacture something.... or use Colombian former cocaine farmers to do similar ?
The Euro is UP because the dollar is down, not because of the Euros bright propects.
Eurozone is officially out of recession, and there does not seem to be a need to put the pedal to the floor. ECB might be content to just watch the economy move back to health slowly.
ok... I am assuming you do not see Chinese [future] production capabilities as a threat I suppose and the Europeans will rely exclusively in the high quality of their products to maintain a healthy economy. [and maintaining good benefits for their workers and a 10% plus unemployment level --but who cares since the high taxes compensate for their lack of income-- **and motivate them to sit on their butts instead**]
In my eyes, The US cannot continue to assume we are living in the 1945-1970 period, things are changing and they are doing so very rapidly. SE Asia and Latin America will become important competitors, so bold moves are needed...
One of the weapons I see of the third world is cheap labor and a cheap currency... so is the US going to sit just watching and allow this to happen ? Europe seems to be more prone to this attitude [*sit & watch*].
Why is China suppressing their own currency ?
Maybe it s just a product of my imagination and all these things are simply not possible because we are dependant on some dinosaur-minded bureaucrats...
If so... you are probably right on all counts.
Maybe I am all confused and lost -gg |
