You keep on living in your little fantasy land. If these two "little" countries upped their prices tomorrow 100% then the US would have not choice but pay up because they have lost the skills to do it themselves. Been to Shangai recently? 'nuf said
You are coming off as quite ignorant. If India and China upped their prices, they can forget US demand for offshoring & cheap sweatshop products. I mean, I thought it was kinda obvious, but the reason China and India are getting US & Europe business if because of the COST SAVINGS. Once it's too expensive, the corps will revive US operations for that labor & production, a few big name companies have in the recent years. I think a simple look at trade figures would show that US is a major consumer of India's and China's boom. It's the corporations pushing the demand, not China and India. If you think these corporations would not just turn to a new country or continent (like Africa) if the prices from China and India stop making sense, you need to recheck your basic 1,2,3s and ABCs. Did you even know that the sweatshop factories in China operate on very low margins? A huge chunk of money flowing in China is just foreign capital, not profits. There are a lot of bad loans, still, floating around. Chinese government wants the Chinese employed and producing first, actually being profitable maybe second or third. Do you even know the kind of work environment that Indian "IT" sweatshops are like? It's ironic, but these workers are more scared for their jobs than their counterparties scared of being offshored in US. These two economies seem to be more exploited than booming. US seems like it is just recycling dollars, give them to China & India for goods & services, while offering investment products, mostly US bonds but others as well. Similiar to the game of recycling petrodollars, printed dollars to buy oil, then sell overpriced old military equipment to the Middle East, as well as offering US investment opportunities to park their dollars.
'US seems like it is just recycling dollars, give them to China & India for goods & services, while offering investment products, mostly US bonds but others as well. Similiar to the game of recycling petrodollars, printed dollars to buy oil, then sell overpriced old military equipment to the Middle East, as well as offering US investment opportunities to park their dollars.' Good point! Chinese are getting paper bonds that can be rendered deep into discount by few moves by the Fed.
World war IV will be fought with sticks and stones and the United States won't have a damn thing to do with it. Just looking ahead
It will be fought with torpedos. remember al gore and the left is saying we all will be underwater in a few years. if you ask him a tip he will say, long the the harpoon industry!
I have been to Shanghai recently. It is staggering. If China upped their prices tomorrow, they'd kill us... and they know they'd kill themselves. We're still a huge trading partner if not the only one. Imagine how well a bank would fare if 1/3 of its loans all defaulted at once. If you can't imagine, look at S & L's in the 80's. That's not how they'll kill us, we are financially tied together. It's a long slow bleed for us. They get richer, we get poorer. This isn't death, except by a thousand cuts over a very long timeframe.
The U.S. is and will continue to be the growth engine for the rest of the world for a long, long time. It's a rather simple: U.S. Consumers spend their paychecks - all of them - and then some, while foreign consumers save 20% to 50% of their incomes (which are, for the most part, far less than U.S. incomes). The U.S. Consumer drives world growth. Anyone who thinks the U.S. is a 'has been' is ignorant of the facts. Do we have problems? Absolutely. Deep, systemic ones, especially in the areas of education, government budget deficits, public infrastructure, technology transfers and irrational tax policy. The remarkable thing about the U.S. is its flexibility and ability to change rapidly. Don't bet against the U.S. unless you're really willing to enter into a high risk wage.
In one fell swoop the USA could send the world into a depression. And it has nothing to do with war. Figure it out yourselves....