SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: basho who wrote (75666)12/15/2006 9:56:30 AM
From: GST  Read Replies (1) of 110194
 
Basho: Resources when first mobilized tend to appear to be cheap -- the best example is the mobilization of relatively cheap labor in China. Labor in China has been cheap as it was abundant and low in productivity. Neither of those conditions hold over time. Money and credit can mobilize resources, but once mobilized they take on something of a life of their own. I now get regular reports from China, particularly in the industrial heartland in the south, that employers are rapidly losing enmployees and cannot attract more. Those unfamiliar with Chinese labor markets are not likely to grasp the significance of this. Chinese labor is now more productive and earning more. Labor is no longer willing to work nearly as much overtime. We are arriving at the saddle point for cheap labor in China. Same with cheap oil that was mobilzed by cheap credit to the point where there is now enough demand for oil that it is no longer cheap. Now we must become more productive users of formerly cheap resources like labor, oil and capital. The same is true of credit itself. During the initial mobilization of the Chinese economy over the last quarter century, the trade surplus of China was useful to build infrastructure based on cheap credit -- and the infrastructure build out in China is truly awesome. But China and the US must come to grips with imbalances and that will mean less cheap credit both for us and in China itself.

We are facing the end of cheap labor, the end of cheap oil and the end of cheap credit. If you only focus on credit you will never see the whole picture.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News