Hi DJ, <<profits ... growth ... capacities>>
I understand small and medium size manufacturing businesses in USA (underpinnings of the manufacturing economy) of this USA-centric world employ lots of folks relative to the big USA-resident manufacturers. They have been losing revenue because their customers, the large manufacturers, have been (a) squeezing all suppliers, (b) moving production offshore, (c) cutting back on capacity at home, (d) losing to direct imports by overseas competitors financed by Greenskaputnik.
These small/medium sized manufacturing businesses have generally failed to keep up with quality enhancing capital investments, do not possess the latest technologies, rested on their behinds, also borrowed too much and not saved enough to finance owner/manager/worker lifestyles, pay too much to their employees relative to new world standard, incurred too much bureaucratically imposed health, social security, and administrative burdens, ... and their employees have done the same, as in not kept up with the latest know-how, being progressively further away from the center of action, borrowed too much, not saved enough, ...
Oh, yes, forget about the I-will-cut-your-hair and you-will-flip-my-burger service economy, for that is not what true economic growth is about, but only what fiat GDP increase can be. It will be far easier to lose the service economy than the industrial one. When the factories stop, all services will get a trim.
The innards of the manufacturing economy is rotting, and the surface cladding of services and housing value would have fallen quickly via Argentina style devaluation or Thai fashioned debt implosion had it not been for Greenspud’s unforgivable release of liquidity that temporarily covers up the ugly damage and numbs investors’ feel for what must inevitably be. Now, instead, we have rising home values, increased borrowings, suspension of belief that a deep cleansing is a must, everyone grabbing for tinier crumbs of a diminishing pie, via more borrowings, higher deficits, and ever more reckless mortgaging of truth in favor of Greenspin.
On the above, I have no compromise position, either I am fatally wrong or the market is out to lunch, soon to return to a ransacked office.
On capacity, there is plenty of capacity increase all around my neighborhood, at the periphery of the USD-space, assuring ever more folks a chance at gainful employment at a, oh, let’s just say a fair free market price, paying for an ever diminishing bureaucratic burden, saving for a better future, feeling generally purposeful, growing at incredible rates that the spinners find it necessary to disparage, in face of strong anecdotal evidence (commodity shipment, energy usage/shortage, GM car sales, PC purchases, cement use, etc) and deny what is and must be. All this growth in everlasting thanks to Greenskaputnik.
This SARS thing, even, could end up being a long-term economic boost, unlike war. Some say war is good for the economy. I can easily make a case that disease is better still for the same purpose. Should we connect the two strands of thought, a bull market is born:0)
Chugs, Jay |
