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 : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (93549)	1/30/2009 3:11:21 AM
From: NOW	Read Replies (2) \| Respond to of 116555

"Imports from low-wage countries such as China are resold in the US at a greater profit margin for US importers than that enjoyed by Chinese exporters. Thus a $2 toy leaving a US-owned factory in China is a $3 shipment arriving at San Diego. By the time a US consumer buys it for $10 at Wal-Mart, the US economy registers $10 in final sales, less $3 import cost, for a $7 addition to the US gross domestic product (GDP), yielding a ratio of GDP gain to import value of two-and-a-third. Chinese GDP gain to export value ratio is zero if the $2 export price becomes part of the US capital account surplus. If half of the $2 export price is used for paying return to foreign capital, then the ratio is in fact negative. The numbers for other product types vary, but the pattern is similar. The $1.439 trillion of imports to the US in 2002 were directly responsible for some $3.35 trillion of US GDP, almost 32 percent of its $10.45 trillion economy. That is why US policy-makers have no incentive to reduce the trade deficit. But during a presidential campaign, blaming it on China’s undervalued yuan gets votes." Mish: have we actually been in a depression for a very long time? Does the value markup of goods manufactured in china real gdp gain in the lifes of ordinary folks?