Robert and all,
I am a Makin fan. It is quite interesting to go back and read his previous articles. So far, he has not been far off.
As for over capacity, I want to add that there is tremendous over capacity in labor also. China has over 1 billion, India around 1 billion. Then there are almost 300M in Indonesia, about 70M in Thailand and who knows how many in Bangladesh, Myamar ..... Bottom line is about 2.5 billion people willing to work for anywhere between $50 to $200 a month. They can make more Nike, Reebok, Barbie dolls than the western world can ever consume.
Having just returned from Thailand, I see empty buildings everywhere. The rate that they were building in China, during visits in 1996 and 1998, I don't see how they can absorb the supply. Hong Kong investors were buying real estate in major cities such as Shanghai, I don't think there is much of that anymore.
While the US had remained an oasis of prosperity, whether it can survive another round of Brazil, Asian contagion II or Russia remains to be seen.
It is certainly going to be an exciting year.
Ramsey |
