hello russ, a non-question: which came first, chicken or the egg?
It may be the case that China export cannot be wrecked by China Train Wreck scenario of any sort, because most of what China ships are necessary, as opposed to 'can do without'; and also, the middlemen between China and end markets (i.e. Walmart etc) have far more margin% to be squished out then the typical China-based manufacturer, many of whom are foreign-owned and integral to offshore-based global corporations, and so will be squished when the need arises.
China's export will suffer the sort of train wreck when and if America no longer requires socks and bras, and if / when that happens, we got nothing to worry about any more.
China's cost increases, of the commodity kind, will of course be absorbed by all along the chain, all the way to the end-buyer, as that cost increase is global in nature.
China's wage push inflation is effectively non-existent, and if/when becomes a problem, the RMB will devalue,as it should and must in any case. Nothing new here.
Bottom line, everything is fcuked any way, and so we might as well enjoy the process of collapse, slowly, of one schema or another construct.
Chugs, Jay |
