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Politics : Foreign Affairs Discussion Group

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To: Keith Feral who wrote (147659)	10/12/2004 1:03:00 PM
From: Michael Watkins	Read Replies (1) of 281500

A 4 fold increase in the price of gas from $2 to $8 would certainly cripple the competive advantage of cheap labor from China. Maybe the end to global imperialism will take place because of the full realization that consumer goods cannot be made in foreign sweatshops and shipped to the US at 10 times the cost. The demand push for goods and serivces is under tight surveillance. A four fold increase would tip western economies into a massive recession, most likely, as consumer support for the economy would plummet. While energy is a larger part of Asia's cost base than ours (since their labour is so low), their labour will remain low. Everyone will suffer but proportionately, western economies will suffer far worse.

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