posted on Jan, 27 2009 @ 11:51 PM
The great decoupling theory bombed, but China still supplies global consumers with low cost finished goods. The sun may set on the era of 'ultra
cheap' as China begins to export it's soaring inflation...but in a severe economic downturn, where are increasing numbers of consumers going to
shop...Neiman Marcus? Crate & Barrel? or.......retailers like Walmart?
US manufacturing capacity and exports, have been reduced to durable goods/capital goods (items with multi-year utility), cars, trucks, construction
equipment (CATERPILLARS..hint/hint). Imho, we
have the vulnerable manufacturing base, not China. In an economic slump, cheap consumer goods are
essential......a new SUV isn't.
Low cost consumer goods aside, who leads the Globe in
? (begins with C, and it isn't
Our exports are falling as fast, or faster than our imports. If the inflationary burden of financing our trade deficit begins to outweigh the
benefits, China may cut the band on the floating dollar peg. Result? Uncle Buck sinks like a stone. While congress continue to bicker over fiscal
policies & taxpayer funded stimulus bills, China has already
implemented new domestic economic programs.
Nope!...unless we re-classify Big Mac' as durable goods....we're freakin' doomed!