Or perhaps they are really trying to avoid another $140 a barrel speculative spike followed by economic collapse like happened in 2008?
I suppose it might cause speculators to give up and go away seeing that they can't hope to make money when the governments decide who the winners and losers will be...
Yes, we SHOULD have stopped the oil imports back in the 70's/80's, but the idiots in Washington prevailed as usual. Oil accounts for over 1/2 of the trade deficit last time I looked, but I haven't seen numbers lately. I'd bet its gotten worse. I have heard recently that we are importing 75% of our consumption, so its a much more critical situation than back in the 70's when it was 30 or 40% IIRC.
Oil affects shipping costs, true, but it also drives manufacturing costs higher as well, and manufacturers not in the US are not taking the price hikes we are getting here, because their currencies are not being debased as quickly.
"it seems to me that labor cost are the prime issue and why foreign operations are so fruitful. If you can employ people without all the fringe (employee overhead), with no age limits, racial quotas, minimum wage, etc. it only makes sense to protect our companies and employees.
We could do that by requiring the same conditions ... or they can't be imported. No tax or tariff just No Entry. We've had tainted foods for both people and pets, counterfeit shoes (New Balance was one.) and phony meds. Better to spend on inspections than health problems."
I think it would be difficult to enforce laws that try to identify what goods made in a foreign country were not made according to OUR laws. Ok, some things can be inspected (at the cost to the seller), but I bet we have many laws, like anti child labor laws, that get skirted around, one way or another, and only rarely get enforced. Those factories are still gone from the US. Once in a while we cut off the import supply of this or that, but it hasn't helped the trade deficit, nor has it brought back the jobs.
That is why we need to put an overall governor on the trade balance, to change it back to where we actually TRADE with other countries, not just borrow more to buy from them.
Having worked in accounting and as a consultant at companies with many manufacturing plants, I can tell you that unless you are trying to do things with chemicals or paints or plating, there are not usually huge costs from the EPA, and if you are running a safe manufacturing shop, OSHA costs are also minimal.
Your major costs are labor, overhead and materials. Overhead can be broken down between what is fixed or semi fixed, like the cost to rent a building, run the office and account for it, buy machinery, and run the lights, insure it, heat and cool it, etc, and costs that are variable, some of which varies depending on the number of people you have like workmens comp, health insurance, and ss/medicare costs, and some of which varies depending on what you do or make, like supplies, consumable tools, etc. You could probably look at the financials of a small manufacturer to get an idea of the percentage breakdowns, but suffice to say that if the total cost is 1/10th of ours, and the raw materials are the same, it stands to reason that their labor and overhead costs must be dramatically lower compared to ours. You aren't going to get the rest of the world to raise their costs to our level. Yes, they will probably rise, but we need to reduce the total costs as much as is reasonably possible to make our products as competitive as possible.
The person buying the product usually doesn't care if it was union made, whether an NC machine was used, or whether the machining was farmed out to some other company, or how much the CEO make for that matter. They just care about the price they have to pay and whether the part will work.
We agree I think on probably 85 or 95% of this stuff, so I won't harp on the minor differences further, but if we don't stop allowing our nation to be taken advantage of trade wise, the depression will never end until we are at a pay scale below that of China and our other competitors. I shudder to think what life here will be like by then, and it just pisses me off that our government has allowed and encouraged this for the past 40 years or so to get us into this sad state.
My guesses as to the reason why the price difference on rotors is only 100% different are because the cost of a rotor is probably much more weighted by raw material cost than a filter would be, and possibly that I am comparing selling prices, not cost, and that the seller might be selling the Chinese made product at a higher margin.
But really, those are not important compared to the concept that changing the rules a bit will not bring back the jobs, because even if it DOUBLED the cost of your filters, for example, they would still cost 5 times as much to make here.
If we REQUIRE a balance of trade, but still let the free markets decide what goods we should trade (ie using Buffet's Trade Certificates idea, not tarrifs or arbitrary limits by type of goods or particular country), then in time, manufacturers will choose what products can best be made here or are worth buying certificates to import.
The most important thing I'd want to get across is that the depression can not end until this is done in some way or another. People without jobs can't afford to buy much, and produce nothing to export.
If they had to maintain the same level of safety, etc, it would add a tiny amount to their cost, and the differential would be a little less than the 100% it is now.
Price something manufactured in China. Price the same thing made here. For example, a brake rotor. The Chinese made rotor sells for $20 or $25, vs the US or Canadian made rotor for the same car sells for $45 or $50.
Its pretty obvious that they will sell many made in China rotors and very few made in the US or Canada, and they do. If improving safety and other employee benefits added $2 (10%) to the selling price of the Chinese made product, it would change nothing in terms of sales and in terms of jobs, because still nobody would pay the extra money to buy the US or Canadian made rotor. IMO, soon, you won't even be able to buy things like that made here because the manufacturers will give up making them as volumes drop, raising their costs, and making them even less competitive, or forcing them to take losses on each unit sold, just to sell the inventory.
I gave that example, because I have a race car that eats rotors like crazy, and I've bought both the Chinese and North American made ones for it. I had to return a Chinese one because it was so badly warped out of the box, but the replacement one ran ok for a few days.
The solution is to REQUIRE a balance of trade. By definition, trade is where you sell something to someone and buy something from them. Last I read we buy $10 worth of goods from China for every $1 we sell to them. That is NOT trade.
Its a depression because you don't have a job, and your wife got laid off 2 yrs ago and can't get a job, and your kid, graduated with a masters, with magna cum laude degrees, both bs and ms, can't get a full time job at more than minimum wage.
The good news is I've been very lucky with my investments, and missed the last 2 crashes, and even though my savings don't earn interest, and their value is being debased daily, I'm still surviving, and doing better than the vast majority.
But Obama can up the taxes to the moon on them...
Or hell, he can confiscate them, anyway. Change is good, LOL.
That's why I own Canadian mining companies with their mines in Canada. Canada has a mining culture. They will protect the mining companies like the US protects their paper tigers on Wall St., IMO.
"Aren't we all "speculators"? Corrupt money forces it on us."
Yes, isn't that the truth? I went to the bank and was depositing a check for $125k, and I always go to the head teller (who recognizes me) if I can. She said that I should consider a different type of account to put the money into. Well, the reason I have that account is because it pays 3% a year interest. It turned out that its now been changed to pay 0.09% per year, now, meaning essentially you get no return on your money by putting it in a bank. Anyway, they suggested I talk to their "wealth management" experts, who currently are recommending putting the money into precious metals and commodities, the paper versions, I'm sure, to get a return.
Its not a safe world at all when even the banks are betting on currency debasement.
I can answer part of that. In IL, the max you get from unemployment is about $1100 per month, which if you start adding other benefits that might go with, like food stamps or healthcare, net of costs to get back/forth to work, etc, would make taking a minimum wage job with crap benefits a losing proposition.
The contacts I have in mid sized businesses say they are still alive, but there has been no big increase in business since it rebounded from the big drop off after the crisis.
Like rebuilding in Japan will increase the need for industrial silver, for example...
Isn't it odd that NONE of these TV personalities have noticed that Yen, Euro and Dollars are all being printed like confetti by madmen trying to reflate bursted bubbles, and maybe, just maybe, people are starting to question the REAL LONG TERM VALUE of all this debt backed confetti.
I just want to know WHO is going to REPAY all this debt, and with WHAT?
Not that they did any good for America, but I don't think the lost 20 million jobs was caused by the bankers. The blame for that lies squarely at the feet of the politicians from both parties, who gave China all sorts of beneficial treatment, sending factory after factory, industry after industry, and even the machines from the shuttered factories, off to china. Add some blame for the likes of Wal-Mart, Target, Kohls, etc, who have virtually nothing on their shelves that is made here except food, and add to the blame list the great American consumer, who was so short sighted to buy those cheap Chinese goods, not realizing that the list of jobs lost would eventually include their own. Its an odd coincidence, don't you think, that if you took the monthly trade deficit of say $40 or $50 billion, and divided it by the 20 million or so Americans that would like a decent job, that you'd have $2000 to $2500 per month to pay each of them if we weren't sending that money overseas for imports instead.
Yes, it is a big lie. The paper money, the promise of Social Security and Medicare that we already paid for but will receive, TAXED, at a DEBASED value. The whole nation has become a big Ponzi scheme, dependent on the Federal government to spend money it doesn't have and can't borrow, and for the Fed to print that money to make it possible, and for America and the rest of the world to sit idly by, and still accept those paper promises, fully well knowing that the debts can NEVER be repaid.
I wonder how many years it will be before they admit the nation has been in a depression. I remember them announcing that the recession was over a while back, LOL. They might want to send news of that to the rust belt, somehow.
Thanks both for the update as well as for voicing what I see as an honest appraisal of what the newsletter and TV industries seem to be doing.
I still believe in Rubicon regardless of their banter, but it is very difficult mentally to see it beat down so hard over words.
I still think the true lesson here is to just sell your shares too early when there is any good news that gets TV exposure, and whine over the missed gains instead of crying over losses.
That is the first of a whole bunch of segments. The problem is in my mind, that he is the "sell at the bottom" guy, making his call a month too late, unless the news is terrible in the end.
I bought yesterday in the panic, but I have a habit of taking risks. I am of the belief that RBY really will get at least 4 mm cheap oz from F2, and that is enough to justify a $7 share price. I guess it now depends on where the specialists and shorts decide they need to cover.
IMO, as they slow or stop, the rates will rise dramatically as government borrowing crowds EVERYTHING else out, because it doesn't MATTER what the rate is, they will borrow it anyway.
So, how can the Fed get out of this without causing hyperinflation from POMO, or deflation, depression, and collapse from trying to slow or stop it?
Do they plan on walking this infinitely long type rope trying to balance between the two, forever?
I seriously can't imagine the budget or trade deficits ending, so I'm at a loss as to seeing any "good" way out of the mess, no matter how long term of a view I try to take, because the debt numbers are growing, month by month, not improving.
Ben just made the can another notch bigger and heavier, and gave it yet another kick. I haven't seen any progress to any kind of "sustainable" economic growth, just printing of yet more money and credit to bail out the culprits at the price of punishing those who worked hard, lived within their means and saved.
I will add to the list,
Reduction of real unemployment and underemployment to below 10%. There is no way things will get much better till people are working and earning a living again.
I think will be at least 10 years, if we are lucky and don't have a hyperinflationary collapse.
Or perhaps they are really trying to avoid another $140 a barrel speculative spike followed by economic collapse like happened in 2008?
I suppose it might cause speculators to give up and go away seeing that they can't hope to make money when the governments decide who the winners and losers will be...
But where will they put their money instead?
Yes, we SHOULD have stopped the oil imports back in the 70's/80's, but the idiots in Washington prevailed as usual. Oil accounts for over 1/2 of the trade deficit last time I looked, but I haven't seen numbers lately. I'd bet its gotten worse. I have heard recently that we are importing 75% of our consumption, so its a much more critical situation than back in the 70's when it was 30 or 40% IIRC.
Oil affects shipping costs, true, but it also drives manufacturing costs higher as well, and manufacturers not in the US are not taking the price hikes we are getting here, because their currencies are not being debased as quickly.
"it seems to me that labor cost are the prime issue and why foreign operations are so fruitful. If you can employ people without all the fringe (employee overhead), with no age limits, racial quotas, minimum wage, etc. it only makes sense to protect our companies and employees.
We could do that by requiring the same conditions ... or they can't be imported. No tax or tariff just No Entry. We've had tainted foods for both people and pets, counterfeit shoes (New Balance was one.) and phony meds. Better to spend on inspections than health problems."
I think it would be difficult to enforce laws that try to identify what goods made in a foreign country were not made according to OUR laws. Ok, some things can be inspected (at the cost to the seller), but I bet we have many laws, like anti child labor laws, that get skirted around, one way or another, and only rarely get enforced. Those factories are still gone from the US. Once in a while we cut off the import supply of this or that, but it hasn't helped the trade deficit, nor has it brought back the jobs.
That is why we need to put an overall governor on the trade balance, to change it back to where we actually TRADE with other countries, not just borrow more to buy from them.
Having worked in accounting and as a consultant at companies with many manufacturing plants, I can tell you that unless you are trying to do things with chemicals or paints or plating, there are not usually huge costs from the EPA, and if you are running a safe manufacturing shop, OSHA costs are also minimal.
Your major costs are labor, overhead and materials. Overhead can be broken down between what is fixed or semi fixed, like the cost to rent a building, run the office and account for it, buy machinery, and run the lights, insure it, heat and cool it, etc, and costs that are variable, some of which varies depending on the number of people you have like workmens comp, health insurance, and ss/medicare costs, and some of which varies depending on what you do or make, like supplies, consumable tools, etc. You could probably look at the financials of a small manufacturer to get an idea of the percentage breakdowns, but suffice to say that if the total cost is 1/10th of ours, and the raw materials are the same, it stands to reason that their labor and overhead costs must be dramatically lower compared to ours. You aren't going to get the rest of the world to raise their costs to our level. Yes, they will probably rise, but we need to reduce the total costs as much as is reasonably possible to make our products as competitive as possible.
The person buying the product usually doesn't care if it was union made, whether an NC machine was used, or whether the machining was farmed out to some other company, or how much the CEO make for that matter. They just care about the price they have to pay and whether the part will work.
We agree I think on probably 85 or 95% of this stuff, so I won't harp on the minor differences further, but if we don't stop allowing our nation to be taken advantage of trade wise, the depression will never end until we are at a pay scale below that of China and our other competitors. I shudder to think what life here will be like by then, and it just pisses me off that our government has allowed and encouraged this for the past 40 years or so to get us into this sad state.
My guesses as to the reason why the price difference on rotors is only 100% different are because the cost of a rotor is probably much more weighted by raw material cost than a filter would be, and possibly that I am comparing selling prices, not cost, and that the seller might be selling the Chinese made product at a higher margin.
But really, those are not important compared to the concept that changing the rules a bit will not bring back the jobs, because even if it DOUBLED the cost of your filters, for example, they would still cost 5 times as much to make here.
If we REQUIRE a balance of trade, but still let the free markets decide what goods we should trade (ie using Buffet's Trade Certificates idea, not tarrifs or arbitrary limits by type of goods or particular country), then in time, manufacturers will choose what products can best be made here or are worth buying certificates to import.
The most important thing I'd want to get across is that the depression can not end until this is done in some way or another. People without jobs can't afford to buy much, and produce nothing to export.
Grym,
If they had to maintain the same level of safety, etc, it would add a tiny amount to their cost, and the differential would be a little less than the 100% it is now.
Price something manufactured in China. Price the same thing made here. For example, a brake rotor. The Chinese made rotor sells for $20 or $25, vs the US or Canadian made rotor for the same car sells for $45 or $50.
Its pretty obvious that they will sell many made in China rotors and very few made in the US or Canada, and they do. If improving safety and other employee benefits added $2 (10%) to the selling price of the Chinese made product, it would change nothing in terms of sales and in terms of jobs, because still nobody would pay the extra money to buy the US or Canadian made rotor. IMO, soon, you won't even be able to buy things like that made here because the manufacturers will give up making them as volumes drop, raising their costs, and making them even less competitive, or forcing them to take losses on each unit sold, just to sell the inventory.
I gave that example, because I have a race car that eats rotors like crazy, and I've bought both the Chinese and North American made ones for it. I had to return a Chinese one because it was so badly warped out of the box, but the replacement one ran ok for a few days.
The solution is to REQUIRE a balance of trade. By definition, trade is where you sell something to someone and buy something from them. Last I read we buy $10 worth of goods from China for every $1 we sell to them. That is NOT trade.
No, get real!
Its a depression because you don't have a job, and your wife got laid off 2 yrs ago and can't get a job, and your kid, graduated with a masters, with magna cum laude degrees, both bs and ms, can't get a full time job at more than minimum wage.
The good news is I've been very lucky with my investments, and missed the last 2 crashes, and even though my savings don't earn interest, and their value is being debased daily, I'm still surviving, and doing better than the vast majority.
Ok, so even FDR didn't confiscate mines.
But Obama can up the taxes to the moon on them...
Or hell, he can confiscate them, anyway. Change is good, LOL.
That's why I own Canadian mining companies with their mines in Canada. Canada has a mining culture. They will protect the mining companies like the US protects their paper tigers on Wall St., IMO.
"Aren't we all "speculators"? Corrupt money forces it on us."
Yes, isn't that the truth? I went to the bank and was depositing a check for $125k, and I always go to the head teller (who recognizes me) if I can. She said that I should consider a different type of account to put the money into. Well, the reason I have that account is because it pays 3% a year interest. It turned out that its now been changed to pay 0.09% per year, now, meaning essentially you get no return on your money by putting it in a bank. Anyway, they suggested I talk to their "wealth management" experts, who currently are recommending putting the money into precious metals and commodities, the paper versions, I'm sure, to get a return.
Its not a safe world at all when even the banks are betting on currency debasement.
IMO, the Fed just doesn't want it falling too fast all at once...
I can answer part of that. In IL, the max you get from unemployment is about $1100 per month, which if you start adding other benefits that might go with, like food stamps or healthcare, net of costs to get back/forth to work, etc, would make taking a minimum wage job with crap benefits a losing proposition.
The contacts I have in mid sized businesses say they are still alive, but there has been no big increase in business since it rebounded from the big drop off after the crisis.
Like rebuilding in Japan will increase the need for industrial silver, for example...
Isn't it odd that NONE of these TV personalities have noticed that Yen, Euro and Dollars are all being printed like confetti by madmen trying to reflate bursted bubbles, and maybe, just maybe, people are starting to question the REAL LONG TERM VALUE of all this debt backed confetti.
I just want to know WHO is going to REPAY all this debt, and with WHAT?
Not that they did any good for America, but I don't think the lost 20 million jobs was caused by the bankers. The blame for that lies squarely at the feet of the politicians from both parties, who gave China all sorts of beneficial treatment, sending factory after factory, industry after industry, and even the machines from the shuttered factories, off to china. Add some blame for the likes of Wal-Mart, Target, Kohls, etc, who have virtually nothing on their shelves that is made here except food, and add to the blame list the great American consumer, who was so short sighted to buy those cheap Chinese goods, not realizing that the list of jobs lost would eventually include their own. Its an odd coincidence, don't you think, that if you took the monthly trade deficit of say $40 or $50 billion, and divided it by the 20 million or so Americans that would like a decent job, that you'd have $2000 to $2500 per month to pay each of them if we weren't sending that money overseas for imports instead.
Yes, it is a big lie. The paper money, the promise of Social Security and Medicare that we already paid for but will receive, TAXED, at a DEBASED value. The whole nation has become a big Ponzi scheme, dependent on the Federal government to spend money it doesn't have and can't borrow, and for the Fed to print that money to make it possible, and for America and the rest of the world to sit idly by, and still accept those paper promises, fully well knowing that the debts can NEVER be repaid.
I wonder how many years it will be before they admit the nation has been in a depression. I remember them announcing that the recession was over a while back, LOL. They might want to send news of that to the rust belt, somehow.
Thanks both for the update as well as for voicing what I see as an honest appraisal of what the newsletter and TV industries seem to be doing.
I still believe in Rubicon regardless of their banter, but it is very difficult mentally to see it beat down so hard over words.
I still think the true lesson here is to just sell your shares too early when there is any good news that gets TV exposure, and whine over the missed gains instead of crying over losses.
Not a specific link.
http://watch.bnn.ca/#clip429308
That is the first of a whole bunch of segments. The problem is in my mind, that he is the "sell at the bottom" guy, making his call a month too late, unless the news is terrible in the end.
I bought yesterday in the panic, but I have a habit of taking risks. I am of the belief that RBY really will get at least 4 mm cheap oz from F2, and that is enough to justify a $7 share price. I guess it now depends on where the specialists and shorts decide they need to cover.
Such a shame. It seemed like the one mining company that really had something.
I should have known to sell everything when the CEO went on TV. BNN coverage finished shareholders off today.
600 tons + 900 tons wouldn't pay for the trade deficit for even one year
IMO, as they slow or stop, the rates will rise dramatically as government borrowing crowds EVERYTHING else out, because it doesn't MATTER what the rate is, they will borrow it anyway.
So, how can the Fed get out of this without causing hyperinflation from POMO, or deflation, depression, and collapse from trying to slow or stop it?
Do they plan on walking this infinitely long type rope trying to balance between the two, forever?
I seriously can't imagine the budget or trade deficits ending, so I'm at a loss as to seeing any "good" way out of the mess, no matter how long term of a view I try to take, because the debt numbers are growing, month by month, not improving.
I agree with davefairtex.
Ben just made the can another notch bigger and heavier, and gave it yet another kick. I haven't seen any progress to any kind of "sustainable" economic growth, just printing of yet more money and credit to bail out the culprits at the price of punishing those who worked hard, lived within their means and saved.
I will add to the list,
Reduction of real unemployment and underemployment to below 10%. There is no way things will get much better till people are working and earning a living again.
I think will be at least 10 years, if we are lucky and don't have a hyperinflationary collapse.
But we can't keep borrowing, and there is no way the money can be repaid in real value terms.
Its all hopeless as long as we produce less than we consume.