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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: bentway who wrote (28387)3/19/2005 11:14:24 PM
From: Mike JohnstonRead Replies (3) of 306849
 
Chris,

Outsourcing is simply a way businesses cope with high inflation.

15 years ago an engineer right out of school would earn 35 K per year, with few years experience he would pull in about 50. That was enough for a very comfortable life.
One could buy a decent house for about 150K back then.
Would there be anything wrong if wages and house prices right now were exactly the same as 15 years ago ?

For one, there would be no outsourcing to India on a scale that exists today. Nobody would outsource a job to save 10K.
However, it would be mismanagement and stupidity to pay somebody 150K for a job that can be done for 20K somewhere else.

Continued inflation will only accelerate outsourcing of jobs.
Simply the US economy is becoming less competitive. Will a US based software engineer accept a 50% pay cut ? Not very likely. After all how can you expect an engineer to live in a "tool shed".
What would be wrong with house prices being the same for 10, 20, 30 years ? To me it would mean economic strength,stability and a stable or rising standard of living.

Of course 90% of population is clueless, they have been brainwashed to believe that rising house prices are not inflation but "wealth".
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