My opinion, our foray into China had more to do with Western businesses wanting to gain market share of that huge population. And then the cheap labor to increase profits was too inticing. Western politicians convince themselves (because Western businesses pay them to be convinced) that people who taste the "freedom" of buying shit will go to a democracy. They underestimated the ruthlessness of an authoritarian regime. Businesses and politicians are more arrogant than gullible, more greedy than altruistic. But I won't argue the nuances of either.
We really didn’t have an option after ending ending our money being pegged to gold in the early 1970’s. We sold out our working class to stay the military and political power of the world.
Agree, Poppa. What's going to be interesting is the escalating business withdrawal from China. It has already begun in sectors other than manufacturing. And it's just getting started.
You can argue the subtleties and semantics of accomplishing these, but when the academic dust settles, in business, there are 2 levers to pull ... organic revenue growth and/or reduce expenses. . They (business) saw China as too big of an opportunity for both. They could give a tinker's damn what the politics are as long has they could sell more shit or make things cheaper. And to pull back, western businesses will be lobbying politicians for "assistance" in reducing their expenses, especially if they are forecasting less revenue growth.
I will admit my shortcomings in discussing monetary policy (global or otherwise). That is a whole 'nuther animal.
It won't all come back to the US either. A good piece will be shifted to more politically 'safe' cost-effective markets. India, Philippines, Mexico, Argentina, etc. Though I'd expect manufacturing would be heavily South America if not the US.
Before I retired (~10 yrs ago), global businesses began seeing they underestimated risks with China. There was a big push for India, South America, Eastern Europe and other underdeveloped Asian countries as alternatives for cheap labor (white collar, as well as, manufacturing). We also saw a beginning push on the African continent. I have not kept up with how that is progressing.
Yep. They will go where they get the best deal. Period. They will lobby politicians convincing them why this is in their best interest (personal or political gain).
Businesses didn’t have an option though because of our going off the gold standard allowed us to print money basically limitlessly. The cost of this is inflation but most of the world being undeveloped allowed to offset this through moving production to undeveloped cheap labor which acted like a de inflationary force. This allowed a lot of Americans to continue to do well, unless you were unskilled labor but the Ponzi scheme is coming to an end.
I can't argue any of your points, I'm not well-versed on the topic. I will read your comments and hope to learn from them. I will offer my opinion based on my personal experience. I suspect the captains of industry were a part of the monetary policy, signed on and supported it (if not, possibly suggesting it), especially if it generated short-term gain for the company they represent (and by default, them personally). I am of the opinion the "they had no choice" argument is because they supported and embraced the "choice".
My industry is professional services and I am most impressed with Argentina talent. I believe it is still considered a cost-effective country and there are great people there. Far exceeds India and China, imo.
Biggest driver of The policy was big government because of the influence and programs they wanted to run, and hard to do that with a real currency instead of fiat. This really helped the military industrial complex and big business, which I’m sure behind closed doors helped push it. All of this is also the driving force behind the wealth gap that has grown since the 70’s, the destruction of rural America, and killed small to medium size businesses.
Please explain the whole "gold/silver standard" thing to me, because I don't get how tying your currency to a precious metal does anything.
There's a limit to the amount of that precious metal. Therefore you can't print limitless money. Therefore that money doesn't become worth less over time via inflation. If I can just print more money, why would the money that exists now have any value? At least that's how I understand it.
It pegs your money to a hard stable asset so it’s hard for governments to debase it through printing. This means that the average man can be a saver and not have to be an investor and that assets and goods have a set standard that stayed stable over long periods of time. This benefits everyone and keeps a more even playing field, and there’s not a class of people playing with Monopoly money.
Yep. About 2010ish we were expanding the Argentinian footprint. We hired quite a few Argentinian degreed attorneys and they worked in Procurement doing procurement stuff. Primarily because the Indians they previously hired were a goat rodeo. We also went to Eastern Europe for alot of the computer coding skills in the Application Development arm. I warned folks that they were undervaluing the intellectual capital and networking knowledge of the higher paid American and Western European worker. Levers. The short term profit gain by reducing expenses were too strong of a siren call.
Killing small/medium business and rural farms benefits corporations' profit, marketshare the most. I don't attribute our woes to "Big" government. I attribute our woes to incompetent, selfish people who happen to lead in government and selfish people who happen to be the leaders in corporations.
I think you see it as a bug and not a feature and I’d argue that it is a feature and not a bug. Doesn’t make them evil or bad people, but just a human condition that we’re selfish .
Western Europe exploits the old eastern nations a good bit in the same way we did China for a season. It gets more complicated because a lot of folks from Eastern Europe also provide menial labor on the Western countries creating a bit of an underclass of toilet cleaners, cooks, etc. Africa and South America are interesting to me. Africa is ripe for developing, and from what I've seen in the news and elsewhere, China is building inroads there quite literally. South America seems like a no brainer for investment as well. I think manufacturing prefers the Asian labor because that is where they started and it is close to China which is now a large market, Japan, Korea, China, now Malaysia, Vietnam, and others. I'm no expert on the actual economics of any of this, but I follow cheap guitars. One problem China has is their labor getting too expensive for some items. It will be a while before it completely catches up with them, but it has already started.
