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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (8536)	2/9/2022 2:55:36 AM
From: elmatador	Read Replies (1) \| Respond to of 13803

Businesses are run for profit. If a company's labor costs reaches a point that the business isn't profitable, that capital is going to be invested elsewhere. It is not going to go into paying more for the existing work force until it goes bankrupt. That is what happened starting in the 90s. Elsewhere was China. Into China said capital was invested. That went until everything that could be outsourced already was . In the past 2 years -disregard the Covid noise- that cost of labor has been hitting the sectors that cannot be outsourced. Truckers, crane operators, warehousing, diesel engine mechanics, even hamburger flippers are not available. Case 1: Capital went to where the people were: China Case 2: Is evolving as I write here. And then China is getting older, so is rest Asia. All going Japanese. Africa has 1.4 billion just waiting here...

To: Maurice Winn who wrote (8536)	2/9/2022 6:14:05 PM
From: Gemlaoshi	Read Replies (2) \| Respond to of 13803

Maurice, Excellent explanation of general economic theory! However, whenever there is a sudden disruption in the economic status quo (such as this Covid mess) it often takes a matter of months or even years for economic equilibrium to be achieved. You gave an excellent explanation of how the price/wage differential will eventually be resolved. However, we are still young (in economic terms) in dealing with what has been a major economic disruption. The Arab oil embargo was a similar disruption that started in 1973 with a second embargo in 1978. The wage/price spiral lasted for 10 years until 1982, and the only way to kill the price spiral was to also kill the wage market. This disruption will also be resolved, but not likely in the next few months. Dave