Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (20587)	7/29/2007 11:54:58 AM
From: Metacomet	Read Replies (1) \| Respond to of 220200

Your argument is predicated on the imperative of globalism. There are credible arguments that China no longer needs to rely on the US to purchase their exports to support their economy. They appear to have achieved critical mass where their own population can support a growing fraction of their industrial output. Indeed they are starting to restrict exports of certain raw materials as their internal consumption soaks up capacity. The consequences of these changes need to be carefully studied to determine the long range effects on traditional Chinese trading partners. In particular the symbiotic relationship of the US borrowing Chinese capital to enable American consumption of Chinese, and other goods and services, would seem to be at risk. The ramifications of the demise or significant reduction of that trade loop will have much more negative consequences for the American economy than for the Chinese, who will be able to drive their own destiny by internal growth. Of course in sheer size, the US continues to dwarf the rest of the worlds economies. It remains to be seen who long that might last if the major global factors that contribute to that dominance continue to be trashed by unenlightened foreign policy moves.

To: carranza2 who wrote (20587)	7/29/2007 11:56:29 AM
From: zamboz	Read Replies (1) \| Respond to of 220200

How will Europe be the loser? I see a pretty tight bond between the US and Europe. Can we really pry each other apart? Also Europe is moving fast to catch up in economic development. It is an exciting place to be these days business wise. BTW, thanks for the Atlantic link.

To: carranza2 who wrote (20587)	7/29/2007 12:03:34 PM
From: KyrosL	Read Replies (2) \| Respond to of 220200

I simply look at numbers. There is no question that China's savings and surpluses are based on the huge sacrifices of its workers. There is no question that the smiley curve gives US multinationals huge profits and their executive ranks huge salaries. But the fact remains that after all is counted, China runs huge surpluses and the US huge deficits. And China will use its huge surpluses to eventually turn smiley into frowney. See Lenovo for things to come, if we don't take corrective action. I don't subscribe to the idea that the US is helpless. The US can reverse the situation by relatively simple steps: Impose a Federal value added or sales tax. Around 15% will do it. Exclude food and medicine and increase the earned income tax credit to neutralize the effect on the poor. Impose a gas tax, on the order of what Europe or Japan have, to drastically reduce US energy imports in our lifetime. Eliminate income taxes on the middle class and long term capital gains taxes on everybody to keep the net tax increase just enough to eliminate budget deficits and fund social security. The 15% sales tax, excluding food and medicine, and the gas tax will largely fall on foreign manufacturing and energy imports and will greatly increase the US propensity to save -- coupled with the elimination of federal income taxes for most. That is the only way I see to keep the US competitive for the longer term.

To: carranza2 who wrote (20587)	7/30/2007 3:56:17 AM
From: energyplay	Respond to of 220200

The Smiley curve is NOT a fact of economics, it just describes how things are right now for much of the electronics industry. It is not universally applicable, as the sources of value and high returns migrate over time for every sector of the economy. A strong counter example would be laser printers with replaceable cartridges. HP or Apple would buy printers from Cannon, add HP or Apple software, and sell many more than Cannon would. For the replacement cartridges, Cannon would make most of the money, no matter which distribution channel or label was on the cartridge. Why ? Because the plastic parts in the cartridge were made to a precision tighter than almost every US factory could produce - the US simply could not duplicate it. This situation persisted for years (10 +), while Cannon collected 1 to 2.5 Billion USD net profits from laser printer cartridges. ***************** Kodak figured out a way to injection mold a pretty good glass lens for moderately priced cameras. They were able to get over 50% of the market for glass lens for point and shoot and low end digital cameras. If the lens doesn't have a name brand - like Leitz / Tessar / Nikkor / Zeiss etc. it is most likely made by Kodak. ***************** Look at how much Toyota is making in automobiles - it is manufacturing competence that is the major factor.