very disturbing/interesting read

[sammy the sage]

http://money.cnn.com/magazines/fortune/fortune_archive/2007/12/24/101935724/index.htm?postversion=2007122406

[Lefty]

Just a couple days ago i heard on some newscast that China was about to fall on hard times. Hmmm...

[DJofSD]

What's so disturbing at it?

[JustRalph]

What's so disturbing at it?

I was going to ask the same............

Btw, you ever seen this guy on TV? I think him moving to asia may not have to do with the economy but maybe the lax laws...............

[sammy the sage]

Disturbing to me...then again it just confirms what I've posted before...

and while you not agree w/his china....his U.S. take seems very accurate.


"You mention the possibility that we might go into a depression. What is your assessment of the U.S. economy right now?

In my view, the U.S. economy is in recession. I know the government says we're not. But as I look around, we know that automobiles are in worse than recession. The same thing is true for homebuilders. Much of the financial sector is in worse than recession. So many parts of America are in worse than recession, and yet the government says we're not in a recession. I don't know what's so strong that it's offsetting these major weaknesses in the American economy. I just assume that the government is lying.

A few months ago you said if Fed Chairman Ben Bernanke cut interest rates in response to the credit crunch, it would be "pure madness" and "a disaster." He did. What do you think now?

We have terrible inflation in America, not according to the government but according to people who buy things. We have the dollar under terrible duress. What I said was, If they cut interest rates it's going to be a signal to the rest of the world that we don't care about the dollar, that we want the dollar to go down. That is what has happened. The rest of the world has read the signal very clearly. Inflation, of course, is going up. Commodities prices go higher in this kind of scenario. I think it's a terrible mistake. It may be good for Wall Street. It may bail a few people out. But it's not good for America. I will tell you that I was terrified recently when I saw Bernanke testifying before Congress, and he said that if an American buys only American products in American currency he is not affected by the decline in the U.S. dollar. I couldn't believe the man said that! I was looking at him to see - Is he lying? Is he just using government propaganda? Or does the man just not know? He's supposed to be an economist, and he doesn't know how the economy works! Let's say you only buy American tires. Well, if the price of foreign tires goes up because the dollar goes down, the price of American tires is going to go up too. American companies are going to raise the prices if the competition goes higher. And if the dollar goes down, the price of the rubber in the tires is going to go higher. The price of oil, wheat, copper, everything is going to go higher if the dollar goes down. So it's another signal to get out of the dollar."

[riskman]

O'Keefe said:

You mention the terrible pollution in China. Do environmental and political issues give you pause as you call this the Chinese century?

"First of all, the environmental problems are a huge opportunity. Somebody's going to make a fortune on that. I talk about that in the book and mention some of the companies that will be trying to address the problems. Can they solve their problems? There are going to be horrible setbacks along the way. There certainly were in America as we grew and boomed. In 1907 our whole system collapsed and went bankrupt. Turns out that was a good time to buy. That's going to happen in China too. They will probably have political setbacks, environmental setbacks. I don't know when they're going to be, but take advantage of them."

At some point China will be forced to address this problem,(pollution) seriously-My guess is that U.S. and other foreighn companies will partner with China to use present and future technology otherwise they(China) will lose market share for export around the globe.Asian politicians have loosened government control over their economies. The result is enormous productivity. Anyone in the West who gets in the way of this avalanche of production will be crushed. Consumers will be crushed with bargains. Producers will be crushed with competition based on four major factors: unprecedented price competition, an unprecedented savings rate, an unprecedented work ethic, and unprecedented labor mobility.

Asia learned well: first from left-wing teachers, then from Henry Ford.

[Greyfox]

I will tell you that I was terrified recently when I saw Bernanke testifying before Congress, and he said that if an American buys only American products in American currency he is not affected by the decline in the U.S. dollar. ."

The emboldened above is essentially true, assuming the American product is totally put together from American raw materials.
Imported entities and vacations to other countries would cost more.