The whole US economic story told in one chart

[RDS]

The whole of manufacturing should have been sent to China two decades ago.
The whole US economic story told in one chart - Business Insider

 

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The whole of manufacturing should have been sent to China two decades ago.
The whole US economic story told in one chart - Business Insider

Why should we have sent all manufacturing to China? I honestly don't believe that China could have handled an increase in manufacturing that large.

Anyhow, the most important takeaway from that article is: "we are bullish on growth and nervous of upside wage and inflation risks next year"

I understand bullish on growth, we've had a growing GDP for six consecutive years now and there is almost no indication that we will enter a recession in the next year. what I don't understand is why they would believe that there is risk of inflation, when we have experienced deflation this year.

Long term, manufacturing is simply not going to be much of a job creator in any country in the world. The current trend is that more and more products are "virtual" products. We no longer need to manufacture hand held calculators when everyone has a virtual calculator on their cell phone. We no longer need to manufacture stand alone GPS systems when everyone has one on their cell phone. We no longer need to manufacture writing paper when we send emails. We no longer need to manufacture brochures when companies have web sites.

 

[RDS]

Why should we have sent all manufacturing to China? I honestly don't believe that China could have handled an increase in manufacturing that large.

Anyhow, the most important takeaway from that article is: "we are bullish on growth and nervous of upside wage and inflation risks next year"

I understand bullish on growth, we've had a growing GDP for six consecutive years now and there is almost no indication that we will enter a recession in the next year. what I don't understand is why they would believe that there is risk of inflation, when we have experienced deflation this year.

Long term, manufacturing is simply not going to be much of a job creator in any country in the world. The current trend is that more and more products are "virtual" products. We no longer need to manufacture hand held calculators when everyone has a virtual calculator on their cell phone. We no longer need to manufacture stand alone GPS systems when everyone has one on their cell phone. We no longer need to manufacture writing paper when we send emails. We no longer need to manufacture brochures when companies have web sites.

Better late than never. You can't compete any longer with low wage countries for manufacturing. The two decades could have been used in retraining workers for service industry. Follow cash-rich Apple's example.

 

[imagep]

Better late than never. You can't compete any longer with low wage countries for manufacturing. The two decades could have been used in retraining workers for service industry. Follow cash-rich Apple's example.

Most of the value in American stores was created in the USA. The US trade deficit is only a few percent of total American consumption.

By the time that shipping and time considerations are added to the cost, not all goods can be manufactured cheaper in China.

The US is very competitive in manufacturing products, the only exception may be the most low skilled labor intensive types of manufacturing, but those types of jobs are being replaced every day, not by China but by automation. Computers and robots work equally cheap in every country in the world. Long term, international trade will decline due to automation, with the exception of natural resources which are so rare that they are only found in a few locations in the entire world.