Greatest challenge facing the world economy this century

Politics International Politics
1

demographics:

washingtonpost.com/wp-dyn/ar … 5Mar2.html

a very pessimistic view of the greying of japan. the same trend is going to hit europe and china hard.

japan - population dropping and too xenophobic to allow in many immigrants.

europe - population will drop, young/old ratio plays havoc with generous welfare programs, immigrants are mostly muslim and cause huge conflicts culturally

china - population will drop before the economy is as developed as either japan or europe.

unless something dramatic happens in each of these regions, the economic fallout will be enormous. i fear for taiwan as it looks to be following the japan/china pattern of declining birth rates and xenophobia.

2

And this is bad news? Heck, it makes my day… night, morning. Whatever. Give me a break, my insomnia is acting up again.

3

the other thing you forgot to mention is that the birth rates of the developing nations will still remain high. so as the rich countries populations decline, the poor countries will increase. more poor people, and less rich people to support them means bad times ahead for the poor. so expect there to be less development and humanitarian aid in the future is populations trends remain the same.

4

A friend of mine pointed out an interesting scenario: As China mechanizes, there will be mass unemployment, which, he hypothesizes, will result in mass immigration to Myanmanr, Vietnam, et al… He said the effect an SE Asia was going to be biblical. Or something like that. Just thought it an interesting tidbit to add to this potentially very interesting subject.

5

Why would Chinese go to either Myanmar or Vietnam? Do Americans go to Mexico when they are layed off? That makes absolutely no sense.

6

Maybe they go because the economies in most SE Asian countries are controlled by the Chinese and they think they will have a better chance of getting work there. And Americans and Europeans DO go to 3rd World countries looking for work…why do you think there are so many Westerners teaching English? :laughing:

And BTW, Indonesia is absolutely fill of Mainland Chinese prostitutes. I guess the money is better there than in China even though Indonesia’s economy has been in the toilet since 1997.

7

Well, thanks to human traffickers, that is a problem. Besides which the province of Fujian seems to be so full of risk takers who have a higher tolerance than others to attain success, let’s just say, in what would be considered disgraceful ways. Where do you think TWs and SE Asian Chinese came from? Why, Fujian of course!

Anyway, fundamentally it’s because China is still poor. Same reason why there are lots of Russian prostitutes in China.

8

Sharecropper’s Society

"Warren Buffett has warned that the US trade deficit risks creating a

9

story.news.yahoo.com/news?tmpl=s … an_baby_dc

[quote] If the low birth rate continues, Taiwan’s population of 23 million will start to contract by 2022, according to the cabinet’s Council for Economic Planning and Development (CEPD).

The number of people aged over 65 is expected to balloon to nearly 7 million in 2051, more than triple the current 2 million, said the CEPD, which called for more active pro-baby initiatives. [/quote]

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"Yesterday’s reporttriggered a renewed slide in the dollar, a day after markets were roiled by worries that Japan might shift some of its massive reserves of foreign currency from dollars to other currencies.

The euro rose against the dollar to as high as $1.3482, compared with $1.3417 late Thursday, then retreated to $1.3457 in late afternoon trading. Against the 12-nation European currency, the dollar lost 1.6 percent this week. Against the Japanese yen, the dollar slipped to 104.00 yen, from 104.13, finishing the week down 0.8 percent.

The Bush administration highlighted the positive side of the trade figures, as it has done in the past, by pointing out that the deficit stems from stronger growth in the United States relative to other major economies. Citing the sluggish expansions in countries such as Japan, Germany and France, Treasury Secretary John W. Snow said, “What that suggests clearly is that they are creating a lot less disposable income than we are and therefore they are not able to buy as much from the United States.” Snow’s comments, reported by wire services, came after a speech in San Antonio.

[color=blue]The odds that the dollar, U.S. Treasuries and the U.S. economy will tank, dragging the quality of life in the U.S. down into the tank with them are about a hundred times greater than any threat to U.S. security and stability that Syria poses.

How then to explain the bizarre fixation of the Bush Administration on Syria and almost complete lack of attention to the historic erosion of the U.S. economy?

I guess the only explanation is this is how great empires end – hardening of the national arteries accompanied by dementia and inappropriate fixations. The macroscopic equivalent of a deranged old man wandering the streets seeing things and firing off repeated volleys from his shotgun at his terrified neighbors.[/color]

11

The drumbeat accelerates. Somebody’s got to pay the world policeman’s salary because baby’s always going to need that next pair of new shoes:

[color=blue]"This is perhaps not the week to air such apocalyptic concerns, though they are much on Buttonwood

12

spook, you do realize that the reason foreign central bankers haven’t diversified out of their dollars is because that would screw their own economies, right?

at the moment, they’re forced to stay in dollars and give the us a cheap loan because their economic livelihood depends on it. they’re in a worse position than the us.

and what exactly do you propose the bush administration do about the trade inbalance? throw tariffs at imports?

13

Despite all of the talk to the contrary- central banks ARE adjusting thier FOREX portfolios. Central banks are not buying the same proportion of the current account deficit anymore - How could the value of the dollar drop unless demand for it is dropping?

14

oh, they’re diversifying out of dollars slowly. no question. but a slow move out of dollars will not cause the massive shock that spook was predicting.

even now, central banks will jump in the market to buy dollars at different times to prop up the dollar.

in a way, the us got a good deal. low interest rates and a boost to the economy. the foreign banks are the ones who made the faustian bargain. stay in dollars and watch their reserves shrink in value or sell dollars and watch their currency rise and their export competitiveness collapse.

i don’t think the current situation is healthy for anyone. but i also don’t see it as the doomsday scenerio that spook does. china has more reason to be worried about the sinking dollar than the us does.

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They may be telling a different story to money markets, but Asian central banks have been quietly switching their dollar holdings to regional currencies for at least three years, confirm global banking data. . .

China, India, Thailand, Indonesia, Taiwan, the Philippines and Hong Kong have already started a sell-off, despite a diplomatic show of solidarity for the greenback that is prudently designed to prevent a crisis of confidence in exchange systems. The likelihood is that much of this outflow will never return to US dollars as economic interdependence within East Asia and the widening shadow cast by China’s trading conglomerates are slowly transforming the traditional market structure.

The Bank of International Settlements (BIS), which acts as a bank for the world’s central banks, has just released a study showing that the ratio of dollar deposits held in Asian offshore reserves declined to 67% in September, down from 81% in the third quarter of 2001. India was the biggest seller, reducing its dollar assets from 68% of total reserves to just 43%. China, which directly links the yuan to the dollar and is under US pressure to allow a freer movement of its currency, trimmed the dollar share from 83% to 68%.

[color=blue]"The Bureau of Labor Statistics reports a net loss of 221,000 jobs in six major engineering job classifications.

Today many computer, electrical and electronics engineers, who were well paid at the end of the 20th century, are unemployed and cannot find work.

Confronted with inconvenient facts, outsourcing’s apologists moved to the next level of fantasy. Many technical and engineering jobs, they said, have become “commodity jobs,” routine work that can be performed cheaper offshore. America will stay in the lead, they promised, because it will keep the research and development work and be responsible for design and innovation.

Alas, now it is design and innovation that are being outsourced. Business Week reports (“Outsourcing Innovation,” March 21) that the pledge of First World corporations to keep research and development in-house "is now pass

16

[quote=“spook”]
The Bureau of Labor Statistics reports a net loss of 221,000 jobs in six major engineering job classifications.

Today many computer, electrical and electronics engineers, who were well paid at the end of the 20th century, are unemployed and cannot find work. [/quote]

we can have so much fun with statistics, can’t we? net loss of 221,000 engineering jobs? net loss compared to when? to last year or to the all time high? and which six major engineer classifications are those? are we talking about computer engineers or mining engineers? marine engineers or agricultural engineers?

and after the dodgy statics we get some random meaningless phrase like “many engineers can’t find work.” well, many actors who were well paid at the end of the 20th century are unemployed and can’t find work, either. is it an anomoly? an industry-wide trend? how many is “many”?

i’m sorry, but dell has ALWAYS just slapped their name on other people’s products. that was the whole point of the company. michael dell took cheap parts, put them together, and then sold them.

and philips is an european firm.

17

I’m sitting in an airport in China typing this. In the eye of this storm, as it were. My business is engineering R&D and manufacturing and I can barely keep up the demand from companies in the U.S. who want to shift their product design, development and manufacturing lock, stock and barrel to China and India and close down everything but their marketing and sales operations in the U.S.

You need only talk to a handful of EE or software engineers anywhere in the U.S. to confirm what I’m saying.

It’s almost frightening sometimes to see – up close and on the ground – the rate at which China and India are sucking up technological expertise and capability and, with them, jobs.

A look at almost any major U.S. corporation’s jobs website shows almost all the growth in demand for engineering talent in their China or Indian operations.

I’m not happy about it. On the contrary. I’m frustrated and disillusioned by the cluelessness and kneejerk denials of my countryman and our leadership off solving Lebanon’s and Iraq’s problems instead as if we have none of our own.

Enough said. Have a happy life working the aisles at Wal-Mart and Home Depot and viewing health insurance as a luxury for the rich. I’m taking the reality train outta town.

18

So what are you doing sitting in China? Part of the process? Would you have your job if the US was not shifting these jobs abroad? How will you stop these US corporations from doing so? Just curious. Not an attack.

19

Interesting but wrong.

Given that we are talking here about ‘big’ trends, why would mechanisation result in unemployment?

If that were the case, the most highly mechanised country in the world, the US, would have the worst unemployment. And unemployment would be getting increasingly worse as the economy continued to ‘mechanise.’

What you see in the US is not increasingly high unemployment (despite continuing high immigration rates, too), but rather workers moving from those mechanizing industries to the non-mechanising ones, such as service sectors.

Anyone who has witnessed the huge growth in such industries in China, will feel confident that the same trend is in place.

20

[quote=“spook”]My business is engineering R&D and manufacturing and I can barely keep up the demand from companies in the U.S. who want to shift their product design, development and manufacturing lock, stock and barrel to China and India and close down everything but their marketing and sales operations in the U.S…

I’m not happy about it. On the contrary. I’m frustrated and disillusioned by the cluelessness and kneejerk denials of my countryman and our leadership…

Enough said. Have a happy life working the aisles at Wal-Mart and Home Depot and viewing health insurance as a luxury for the rich. I’m taking the reality train outta town.[/quote]

The Japanese notebook manufacturers had a similar view in the late 80s and 90s. They were not going to send valuable jobs abroad to taiwan. they would not outsource the manufacturing of their products to another country.

Toshiba used to lead the world in notebook computers.

Then, those foolish US companies started outsourcing their manufacturing; perhaps 80% or more to Taiwan.

The Japanese lost their hold of the market. US companies now dominate where once it used to be the other way around.

Your criticism is misdirected.