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.

Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (261206)	4/10/2008 1:24:33 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 281500

>> The country that makes high end goods, can shift to low end goods in a pinch Ehem! Isn't this what I objected to several posts back and you said you had made no such assumption? "Finally, in your analysis you simply assumed that the next lowest cost supplier will simply fill in China's shoes right away. This is very unrealistic. It takes a lot of time to build factories with enough capacity to replace China's, to train workers who can operate those factories, and many countries would be unwilling to take the risk of such massive investments, only to find US and China have resolved their issues in a few months and see their investments in ruins." Kindly replace "the next lowest cost supplier" with your stated "country that makes high end goods" and replace "many countries would be unwilling to take the risk" with "many investors would be unwilling to take the risk" and the argument will be exactly the same. >> Adjustments for the quality of goods are reasonable. If the average new car cost $1,500 in 1950, and $28,000 today, that doesn't mean that you have had an increase in prices of over 18 and a half times in the automobile industry since 1950. A car today is not the same good that a car in 1950 was. Actually, if in aggregate it cost $1,000 to build a car in 1950 and it costs $20,000 to do the same today, then you have had a 20 fold inflation. This argument is even more valid when you compare say 2005 to 2006 instead of going back 60 years. >> Do you have a shred of fact, or the beginnings of a developed argument, to back up this "strong suspicion"? Yes. But it takes too long to teach finance and accounting here.