www.CostaRicaTicas.com

Best stick to talking about chicas and drinking beer.... and lay off the Jack and Kool Aid.

Easier said than done. Europe has been trying to catch up with us for ever and they have a far more advance education system than China! I just don't see. The best and the brightest from all over the world come to USA to pursue their dreams.

I just don't see China competing with us any time soon for attracting the best and the brightest minds from around the world.

There are no margins is cars. In fact there a limited margins in just about everything China produces. Essentially it is all government subisized, which is good for us because we are selling them the industrial capacity.

Think about it this way. Calvin Kline makes a pair of jeans that they sell in Wall Mart for $30. Wall Mart takes $15 of that and they are an American Company. Calvin Kline pays $3 to manufacturer the Jeans. That means the following:

Wall Mart (US Company)share: $15
Calvin Klines Share (US Company): $12
Chinese Manufaturer: $3

Explain to me how the US is hurt in that distribution? The profits are no longer in manufacturing component. Design, Marketing, Branding, Distribution and Retailing is 90% of the value of the product. All things that we excel in.

Look at Nike. $100 for a pair of sneakers. Sure China manufactures them. But they only get about $7 of that $100. US Companies get the other $93. We are kicking ass on that deal!!!

There are no margins in manufacturing consumer products any more, so why are we worried about competing for that business? Cars included. GM make their money on finance, not manufacturing. Let it go, it is horse and buggy business.

Love us or hate us, hands down, unrivaled, we are the innovation leaders of the world in just about every single industry of the future. The entire rest of the world is just trying to keep up. When one of these countries shows some glimps of an innovative breakthrough that we can not match, then maybe there is something to discuss. Until then, we are unrivaled. We are the undisputed innovation leaders of the world. As long as that is true, we will continue to be the big dogs.

Phuck China. We are the big dogs!

It looks like China may already be matching the U.S. in high-tech exports.

From China Daily:


http://www.chinadaily.com.cn/english/doc/2006-01/29/content_516335.htm

From AeA (formerly the American Electronics Association) newsletter:


http://www.aeanet.org/pressroom/prac_TCS_2007.asp

The caveat with these two sources is how they define high-tech (e.g., it's possible that the China Daily piece includes medical equipment, while the AeA report may not). The point, nevertheless, is that the days of China's reliance on Barby are long gone.

Also, though the dollar is still the primary choice for global reserves and commodities, some countries have begun to diversify their dollar holdings (including Costa Rica's Central Bank). There is growing push to re-price some commodities in currencies other than the dollar. In May, Kuwait dropped its currency peg to the dollar and other oil-rich Gulf states have threatened to follow. Perhaps most telling: In recent months, the euro surpassed the dollar as the currency with the largest global circulation.

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It's faster horses, younger women, older whiskey, and more money--Tom T. Hall
No man is a failure who is enjoying life--William Faulkner

dup

Okay, dig a little deeper in the article above. Look at the table at the bottom of the page and you will see that their growth figures are mainly with lower value components along with Consumer Electronic. The margins are being squeezed out of these industries. Let China have them.

Most of those components manufactured in China are shipped to the US and Mexico. Primarily they go US manufacturing companies that produce higher value products that are manufactured right here in the US (or in Mexico by US companies).

If you think Greenspan is a source of wisdom, then I can see why you are so optimistic. My opinion of Greenspan is much less enthusiastic. He was a giant cheerleader for subprime mortages, among other things. He was the guy who said that we needed tax cuts for the super rich because we were in danger of (gasp!) getting rid of the national debt. The guy fueled the dot com bubble then when that burst fueled the housing bubble.

The GDP that the 'bulls' love to quote is made up of something like 70% consumer spending. That spending is made possible, to a frightening extent, by consumer debt. Credit card debt is at an all time high. Home equity is at an all time low, with record numbers of people having NEGATIVE equity in their homes. The Chinese and Japanese, among others, have been willing to lend the consumers (and the US government) money so we get to buy their crap. At some point they may come to realize we are just exchanging their actual products for paper that is intrinsically worthless. The USA's main export is dollars, make no mistake about it. The dreaded Chinese and the dreaded Indians are turning out hordes of engineers while the US students want MBAs so they can become CEOs and earn millions a year. Lots of those engineers and techies will eventually end up working for companies owned by the Chinese, since with all those dollars they are collecting, they have to buy something. Why not buy that facility that makes those MRI machines? It's happening like crazy now and it'll only get worse. Or better, if you happen to be Chinese.

If you want to believe everything will work out fine because USA is #1 by divine right or something, there's not much I can say. But only looking at GDP and the Dow-Jones index is like trying to diagnose cancer by taking the patient's temperature and testing his reflexes.

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"The only normal people are those you don't know very well." Joe Ancis

There are a lot of people that are a lot smarter than us that write expert reports on both sides of these issues. We are not going to change anyones mind, much less shape world opinion.

I don't believe the USA has any divine right to our place in the world.

I do believe that we do not have a rational reason to be fearful of any other country or to be fearful for the future of our families.

Are there problems out there? Of course. But I have been listening to this "downfall of America" stuff since the 60's. For my entire life there has always been a faction of Gloom and Doomers. I am still waiting for the sky to fall.

Those that bet against the dollar, go right ahead.

I am not betting against it.

We will see who looses.

So far I've made quite a bit betting against the dollar. If I see something change to make me feel the US economy is on the right track I can change my direction in less than a day. There were 'gloom and doomers' regarding the dot com bubble, and lots of people lost their shirts. There were doom and gloomers regarding the real estate bubble too, and they were right. Optimism is a great attitude to have in life, but it's not always justified. But as you say, time will tell... time will tell...

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"The only normal people are those you don't know very well." Joe Ancis

Yeah, but the doom and gloomers are out in force long before any actual downturn so keep up the D&G and eventually it will come true (to some degree). Nothing like the dot com or the real estate or the S&L or the gold/silver run ups continue into the long term future. All good and bad things come to an end eventually. Easy to say this or that will happen, but I'd love for the D&Gers to tell me a reasonable time frame as to when something will happen.

I'm anti D&G when it comes to the dollar and if I stay with it long enough, I too will be right (based on history... remember when you could buy a pound for around $1.01? I think the dollar will gain again like the pound).

I know one particular British soul in CR who has for the last 4 years said that the US is heading for a major downturn, finally it seems we are heading for a downturn, but no one knows how minor or major. He always has said catastrophic so I don't believe him, but who knows, in 30 years, if he keeps saying it, it could happen and bam, he'll finally be right on. Interesting note is that while predicting the US will fall apart, he beats the CR real estate market's drum very loud even to this day.

I'm not saying that I know when the dollar will turn around. I'm just in the camp who thinks that it will.

I don't believe our economy has to be good for the dollar to bounce back either. I don't believe the stock market has to be going up for the dollar to bounce back. The currency market is an entity of its own - many factors other than current stock market and economic conditions weigh on currency.

The conventional wisdom is, if you want to be a pundit, give them an event, or give them a date, but NEVER give them both. Both Greenspan and I are smart enough not to violate that rule. If this thread is still alive in a year, two years, or five, somebody will look prophetic and somebody won't. Let's keep in touch

_________________
"The only normal people are those you don't know very well." Joe Ancis

I make no predictions about short term variations in the value of the dollar. It went down, now it is heading back up. There are traders that do that stuff, that is not my thing. I am just saying, long term, I wouldn't bet against the dollar. The deck is stacked in our favor.

As far as the Real Estate Bubble, the Dot Com Bubble, The Savings and Loan Crisis, 9/11, Vietnam, or any other crisis of the day, I look at the glass as half full.

As far as I am concerned these set backs serve only to show just how resilient our economy is. Despite this so called "credit crisis" the Dow is up 8% this year and our economy will grow about 4% in 2007. What more could you ask for? For me that is all the more reason to have confidence in the future. We can take a hit and keep ticking.

When Japans Real Estate market crashed in the 80's it brought their entire economy to its knees for more than a decade. We go through a similar debacle and we barely miss a beat. It is amazing.

The only thing that we lack is leadership that instills confidence in us rather than fear.

Ronald Regan must be rolling in his grave.

FYI: there is a higher profit margin in bottled water than a barrel of oil.

High oil prices are painful, but they spur innovation.

The holly grail for economic leadership in this century is going to come down to which nation develops the next (renewable) energy source. It is not going to be biofuel. The country that comes up with this innovation will be the worlds economic leader for the next century. I like our chances of winning that race. It is not going to be China. I would not rule out India however. They are producing a shit load of engineers.

As far as the US military industrial complex, I am with you. War is an ugly business. I wish the world were a nicer place too. Merry Christmas.