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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: arun gera who wrote (33244)5/28/2005 11:10:38 AM
From: Jim Willie CB  Read Replies (5) of 110194
 
technology has had a terrible impact on US Economy
ATM banking, automatic gasoline pumping, call centers for customer service, etc

China has taken the labor-intensive operations
India has taken the service operations that are transportable

trade is a big part of our economy
but it is largely one-directional

yes, automation had an impact, just like outsourcing is now
the big issue is that Indian labor is 10% of our costs
and Chinese labor is 3% of our costs
if we block or tax or tariff China, then it goes to Thailand, VietNam, Campuchia (Cambodia), etc

the labor differential is not solvable
my view is the USGovt and USFed actively want some trade war
to block the borders
to block export of inflation
which would allow prices and wages to rise inside the USA
but that will have other huge repercussions
like damage to the bond market possibly
like possibly little benefit in hiring, since sales falter
maybe not
the damage could be from higher erosion to assets affecting selloff (demand side)
or from reduced Asian supply (supply side)

my guess is that during this K-Winter, there will be no demand side selling domestically since distress is rampant across the entire US Economy
e.g. Genl Motors

/ jim
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