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"In the Tank Forever": U.S. Consumers, Retailers in a "Death Spiral," Davidowitz Says

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posted on Aug, 28 2009 @ 11:45 AM
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reply to post by wayno
 




How carved in stone is that? Can that not be changed? Is this not the new reality that maybe you guys will have to become exporters in order to regain some solid ground?


Someone else correctly stated that a way to have sudden economic output (production) is a new technology.. while that's not impossible in this current situation, it's not likely.. The Administration is pushing for "green" technology to export to the World.. however if we look at Spain, Europe's largest producer of Green Technology, for every Green job created, 2.3 jobs were lost. It's a high-end high-tech market where not that many workers are needed to manufacture the product. So unless something else is found.. it's not likely to change. And considering that 70% of our GDP is Consumption and looking to our trade balances .. I would say America does not have the will power to reverse this change. And even if we did, it would destroy the illusionary consumption economy we had.



Why would your home based companies not take advantage of that? Mind you, I am not talking about just moving operations there like GM because that wouldn't do your workers much good.


China will replace America as the Worlds leading Consumer, eventually. Within a Decade perhaps. Already American companies are looking to China as new customers.. GM for instance officially sells more cars in China than America. This is good so long as the Yuan's strength increases and the Dollar declines, as to Export a weaker currency is better.. But to be honest, why be based in a country like America to sell to a country like China? The US Tax policies are so restrictive companies would retain more wealth by relocating.

Though I do agree, it could very well lift our manufacturing base... though our country would be a very, very different place.. and China would have to be a stronger economy than us.. not something I see happening anytime soon, nor would America willingly allow that to happen (I hope)




posted on Aug, 28 2009 @ 11:52 AM
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Originally posted by Rockpuck

Sudden Production output (Major Total Wars)



Well crap, maybe the GOP is right and this is the only legitimate option. Start WWIII and let's get this economy some life support. Dang, that sucks.

Great points though. Many don't see it that way but I think you are very close to the truth of the matter.



posted on Aug, 28 2009 @ 11:54 AM
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Agriculture. No matter how poor people get, people will always need food. And America has a LOT of room to grow stuff. I just wish I knew how to farm.



posted on Aug, 28 2009 @ 11:56 AM
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reply to post by dariousg
 


While technically the recession of 2001 ended well before the Iraq War II, if you look at the market charts and employment charts, as well as corporate earning power, the real pickup didn't happen until Spring of 2003. Coincidence? No. War pumps hundreds of billions into the economy, and employs hundreds of thousands.. the war has wound down considerably, and most of the money is spent in Iraq.. what would really help now is another, even larger war.. which could very well happen in the next 3-5 years.


Originally posted by mattifikation
Agriculture. No matter how poor people get, people will always need food. And America has a LOT of room to grow stuff. I just wish I knew how to farm.


Agriculture doesn't yield profits enough to sustain America.. if it were, poor countries who rely mainly on agriculture would be rich, not poor. Manufacturing is what America needs.

[edit on 8/28/2009 by Rockpuck]



posted on Aug, 28 2009 @ 12:00 PM
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History is full of this type of naysayer, the sky is falling, but I suspect you will wake up tomorrow and move on with your day, day after day, waiting for the sky to fall.



posted on Aug, 28 2009 @ 12:03 PM
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Originally posted by triune
What does America produce these days that the rest of the world desparately wants.....apart from weapons ?


Not much. I studied official export statistics from early 1990s and it's beyond frightening. We used to export tons and tons of stuff to Canada and elsewhere, and now it shrank to nothing. It's amazing that there is no element in our society that takes it upon itself to educate public on matters of utmost importance such as this one.

There are still US products that are in high demand -- tractors, for example. Caterpillar's business is good, and they are one of the few components of our country's export structure that perform well.

I think we need to reinvent our industrial production on a new technology base to regain our leadership in the world.

And I also think that Mr. Davidowitz needs to lay off Red Bull before his interviews



posted on Aug, 28 2009 @ 12:05 PM
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Originally posted by wayno
reply to post by Rockpuck
 



The US Consumes and Imports, we do not Produce and Export


How carved in stone is that? Can that not be changed? Is this not the new reality that maybe you guys will have to become exporters in order to regain some solid ground?
...


While not carved in stone... it's pretty well entrenched.



This is a 2 TEU (Twenty Foot Equivalent Unit) cargo container. A considerable part of all shipments travel this way... things like consumer goods. (Lamps TVs, washing machines,iPods, etc...)

The Port of Los Angeles is the largest containerized cargo port of the United States... there are several other facilities across the US, but LA currently holds top billing.

Look at the inbound loaded (imports) verses the outbound loaded (exports)



There is your trade deficit. Almost 2 to 1.

Granted, this does not cover Break Bulk, Bulk and Liquid shipments, but it's a good measure of the ratio.





Originally posted by Pappie54
History is full of this type of naysayer, the sky is falling, but I suspect you will wake up tomorrow and move on with your day, day after day, waiting for the sky to fall.


And that is exactly the attitude that a placated public will have. Rome was too big to fail... remember them? So was the Byzantine Empire, several Dynasties in China and other governments throughout the world and history.

Do you really think that the average everyday Roman Citizen knew that it was falling while it was happening?

Nope.






[edit on 28-8-2009 by RoofMonkey]



posted on Aug, 28 2009 @ 12:09 PM
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reply to post by RoofMonkey
 


I agree with your message and facts, but just to play devil's advocate, if you are importing sand and exporting gold, the 20-foot equivalent traffic is bound to be different in different directions



posted on Aug, 28 2009 @ 12:15 PM
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True.

I had a rough time on deck watch at anchorage in Mina Sulman (Bahrain) because of the iron (ore?) pellet processing facility. It was fed from a ship moored there. The dust was horrendous. Also, the vapor emanating from the "Livestock Express" in the Red Sea was nauseating. They had 300 to 400 dead sheep stacked in the corner rotting.

It's amazing what people will ship.

[edit on 28-8-2009 by RoofMonkey]



posted on Aug, 28 2009 @ 12:16 PM
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reply to post by RoofMonkey
 


Yes, thank you for the chart
.. Trade deficits will impede economic expansion in this economy without Credit Expansion simply because as wealth floods out of the country, the dollar will weaken. This can continue dramatically, and as the Dollar continues it's decline, the exports will pick up and imports will drop. But either way, a drop in consumer power in America will effect the entire World.. so long as we cannot consume at a level equal to what we have seen in the past couple years, reaching the Status Quo of what we now deem "normal" is quite frankly impossible. We will be lucky enough to be Stagnate let alone see consumption at 2007 levels or corporate profits from domestic sources at 2007 levels..

And while the Dollar's decline will actually mean higher corporate profits (through inflation) and so we could believe an increase in hiring by these multinational corporations, it will also create the side effect of decreased consumer power if wages don't expand at the same rate the dollar declines.. or else as the Dollar weakens more and more American's will eventually be "under water" with debts due to the increased cost of living, causing further defaults on loans and a continued deterioration of the Credit Markets...

Basically, to be frank, it won't stop the Deflationary Spiral.



posted on Aug, 28 2009 @ 12:22 PM
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Its kind of hard to increase spending if you are effectively broke and without credit.

What we have experianced over the last few years isn't really a bona fide increase in the economy (my opinion), it's the taking on of more and more debt.

Even this last "Cash for Clunkers" program was nothing more than a thinly guised way to get people to increase their personal debt load. I wonder how many realize that they paid sales tax on the full sticker price of the vehicle, and will owe the tax on their "rebate" come April 15th. And that's not counting the new debt that they have.





Data Source: Bureau of Labor and Statistics and The Federal Reserve.




[edit on 28-8-2009 by RoofMonkey]



posted on Aug, 28 2009 @ 12:25 PM
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Originally posted by dooper

We've created an entire population of financial and social parasites.




Amen to this! How many people are so concerned with driving that luxury car, or getting that huge home that they can flip in a few years for a boat load of cash?



posted on Aug, 28 2009 @ 12:33 PM
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People still need the basics.

They need food, clothing and a place to live.

Although, the people who have lost their jobs are not looking to buy all the extras, people that are still employed are starting to loosen their purse strings once again.

I don't see it as all doom and gloom. I see it as a reset point. People will have to make decisions about what is important to them.

Ridiculousness levels of conspicuous consumption have certainly declined buy people are still buying stuff, just not as much.



posted on Aug, 28 2009 @ 12:36 PM
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reply to post by Wildbob77
 


There is always a reset point. In a recession. In a depression. In a complete and total collapse. There will and has always been a reset point, or "Curve" as it's called in economics..

The "Doom and Gloom" is only a matter of "how far until we reach bottom?"



posted on Aug, 28 2009 @ 01:20 PM
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We'll probably never get our strong manufacturing back. Not until every other country in the world raises their minimum wage and eliminates sweat shops, anyways. Our manufacturers just can't stay competitive in cost. Why should a factory pay somebody here 10-20 dollars an hour, when somebody in China will do it for 5?



posted on Aug, 28 2009 @ 01:21 PM
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While I agree that the current economy is doomed, and that a complete reset is needed (especially in government), I disagree about the Green Technologies.

A Great War is the most likely solution, but a new technology providing portable clean energy could do the same thing!!

If we were able to provide cheap, clean, portable energy to the remaining rural areas of the world (Rural China, Africa, Outback, etc.), we would create a whole new population of consumers! Production would rise in all countries, Agriculture prices would go up, optimism would rise, and new resources (people and materials) would become cheap and available.

Like I said, I think the war will come first, but I believe there is a "Free" Energy on the horizon, and it will be the next age!



posted on Aug, 28 2009 @ 01:38 PM
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reply to post by getreadyalready
 


No, green techs cannot save us.. it killed Spain, in fact.. The Technology is to cheap, doesn't require enough manufacturing, and the market is rather limited..

Not to mention every time something "green" comes out, it replaces it's "dirty" counterpart.. so lets say we move to clean energy, well all those coal miners and coal power plant workers etc are out of a job.. and how many techs does it take to run the Hydro plant or the Solar Farm? .. Not nearly as much as it takes miners, railroad workers, power plant techs, etc.

No.. Green Tech will not save us, in fact, it would do us more harm.



posted on Aug, 28 2009 @ 01:39 PM
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Originally posted by wayno
reply to post by Rockpuck
 



Sudden Production output (Major Total Wars)


The scenario you describe sounds insular - as if the US was an island unto itself. Given the global nature of business, I am wondering if something other than war could help pull you out/raise demand for production; that is, demand from other countries where the economy has already begun to expand?

So many people in the US talk buy American, but it doesn't look like Americans can consume their way out of this on their own. They have to rely on international relations and an international market.


Have you heard of Lyndon Larouche? I believe your somewhat on course with his ideas, I think. Anyways he's a political activist that pretty much is saying that we need to file bankruptcy of the U.S. and form a aliance of four major nations. I haven't really seen anything about him on ATS other than the thread I started on him but still didn't really get too many thoughts or stances on the man. check him out. www.larouchepac.com...



posted on Aug, 28 2009 @ 01:48 PM
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Originally posted by Rockpuck

Deflationary Spirals end in three ways:

Sudden credit expansion (which sets the economy up for another collapse in a few short years)

Sudden Production output (Major Total Wars)

Bottoming Out: In this situation unemployment would have to be 40-60%, the economy would basically need a complete and total reset.. credit expansions are incredibly toxic to a normal working Capitalist economy.. it's wealth that isn't really wealth.. it's economic expansion that eventually needs to be repaid.



Since the banks seem dead-set that the first won't happen, and .gov is doing everything possible to prevent the third, does that leave the second option?

Who would facilitate this? China, when we massively default on our .gov debt? Or would they just be biting the hand that feeds them?

[edit on 28-8-2009 by hotrodturbo7]



posted on Aug, 28 2009 @ 01:51 PM
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reply to post by Rockpuck
 


The part of "Green" that I though could save us is an entirely new energy source not dependent on fossil fuels. You are correct about just changing from dirty industries to green ones, but I am referring to something entirely new. Something similar to the Industrial Revolution but with Energy at its core. The way it could save us is by tapping into a couple of billion people that are not currently part of the global consumer system!

I could be wrong, and I still think another Great War will come first, but I believe in the next 10-20 years we will have a new energy source that will revolutionize the global community and economy!




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